Burberry UK sales drop as luxury tourists lose interest

Thursday, January 18, 2018

The British brand, Burberry, has reported a slump in sales as the luxury shopping spree in the UK is seeing an end.

The brand, known for its trenchcoats said that sales at established UK stores have gone down by more than 8% in the three months to 31 December, mainly because of the drop in the number of high-spending visitors from China.

Global retail sales at Burberry’s established stores rose 2%, disappointing expectations in the City of a 3% rise. The share prices of the company fell 8% to £16.43, to which the experts explained that Chinese tourists, who made up a large proportion of overseas shoppers in the UK last year, were heading elsewhere, including Japan.

A year ago, Burberry’s UK sales rose by 40% as overseas bargain hunters made the most of the slump in sterling after the Brexit vote. Some of the luxury shoppers consider exchange rates and travel fees when deciding where to buy luxury handbags or trenchcoats, which can at times rise up to £1,000 each. In late 2016, the fall in the sterling value has made the UK an attractive shopping destination however the fluctuating value has become stabilised since then.

Marco Gobbetti, who took over as chief executive in July, said: “We are building on strong foundations and are fully focused on the successful delivery of our multiyear plan to position Burberry firmly in luxury and deliver long-term sustainable value.”

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