Burberry's (BRBY) shares fell 5 per cent after the group warned that pre-tax profit will come in at the lower end of previous guidance following an ongoing struggle to fuel sales growth in the Far East in the second half. Total sales fell 1 per cent in the latter half of the year, although like-for-like sales rose 1 per cent excluding Hong Kong.
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With about two-fifths of Burberry's customers coming from China, the strength of the yuan, the country's ongoing corruption crackdown and slowing growth in the region, have all fed into its woes. It isn't alone, with French luxury group LVHM also issuing a disappointing update last week. Burberry is responding to the challenge by cutting costs and shaking up its fashion lines.
