Burberry Warns of Dire Sales Slump as Coronavirus Spreads

credit Business of Fashion

The British luxury giant had previously flagged a significant hit to sales in China, but the pandemic’s spread to Western markets has worsened its outlook, with fourth quarter comparable retail sales now expected to be down 30 percent.

ritish luxury giant Burberry warned of a dramatic hit to sales Thursday in a stark foreshadowing of the pain to come for the wider luxury market as the Covid-19 pandemic spreads, forcing store closures and savaging consumer demand.

The company — which, like much of luxury, is heavily exposed to demand from China, where the outbreak first began — said it has already seen sales fall between 40 and 50 percent over the last six weeks. However, it expects the decline to worsen to between 70 and 80 percent in the final period of the month. Overall, Burberry expects comparable retail store sales in its fiscal fourth quarter, which ends March 28, to be down around 30 percent compared to a year earlier.

The brand’s updated guidance comes as western markets grind to a halt and China begins to reopen. According to Bernstein, 44 percent of Burberry’s sales are to Chinese nationals, though much of that spend comes from tourists shopping outside of the mainland. And that customer isn’t returning any time soon.