Luxury fashion brand Burberry has announced a further deterioration in the demand for its high-end products in December, leading to a downward revision of its profit guidance for the year. The London-based fashion house cited a persistent “slowdown in luxury demand” influenced by global increases in the cost of living and interest rates.
Burberry’s CEO, Jonathan Akeroyd, expressed concern over a “further deceleration” in key December trading, impacting the company’s profitability. Retail revenues for the three months ending December 30 dipped by 7% to £706 million, with like-for-like store sales decreasing by 4% during the crucial trading period.
While Asia experienced a rebound, particularly in China and Japan, sales in the Americas market fell by 15%. The company now anticipates an operating profit between £410 million and £460 million for the fiscal year ending March, with adverse currency exchange rates expected to reduce revenues by £120 million and profits by around £60 million.
Despite these challenges, Akeroyd emphasised Burberry’s commitment to transitioning to a “new modern British luxury creative expression.”