Richemont and Burberry sales down - China remains difficult
16 Jul 2022
China’s Covid-Zero approach still remains the biggest challenge facing the luxury industry as the pandemic enters its third year.
Lockdowns, stringent testing requirements and a near collapse in Chinese international tourist travel hit Richemont and Burberry Group Plc last quarter, with investors concerned about the future of arguably the world’s most important luxury market.
Richemont, the maker of Cartier jewellery and Vacheron Constantin watches, saw sales in mainland China plunge 37 percent in the three months through June. Burberry’s like-for-like sales were down 35 percent in mainland China because of restrictions and store closures.
“The biggest impact in China is really relating to Covid as opposed to any wider economic impact,” said Julie Brown, chief operating and financial officer of Burberry. “40 percent of the distribution was effectively closed at the beginning of the quarter.”
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(Source: Bloomberg, July 2022)