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China’s slip-up may last, says Burberry boss

BURBERRY'S chief executive, Angela Ahrendts, sent a tremor across the luxury goods world today as she warned that the slowdown in demand from Chinese consumers could turn out to be more than a blip.

Her comments, to the French newspaper Les Echos, came at the peak of "Golden Week", the national Chinese holiday which is one of the most important sales weeks for luxury goods retailers as tourists from the country hit the shops.

Shares in Burberry fell 20p, or 1.23 per cent, to 1,608p. Luggage-maker LVMH, Swiss watch group Richemont and silk scarves designer Hermès also fell between 1 and 2 per cent.

Ms Ahrendts, pictured, who first warned that China's growth was slowing a year ago, said of the slowdown that it was "maybe not a temporary accident but a new norm".

She added: "We have been very transparent on China, explaining that our sales there have been slowing down. But... we have done better than we had been expecting." Ahrendts said there were still 30 "flagship" cities in China each on the scale of Paris or London.

China expects to report economic growth of 7.5 per cent this year, stronger than most economies but the lowest for the country for 23 years. Luxury goods sales have also been hit by a clampdown on conspicuous spending by officials keen to curb corruption. Ms Ahrendts pointed to other growth regions in the world including Indonesia, which she said could become the new China.

Claire Adler, a luxury consultant, said: "While some parts of the Chinese market have reached saturation point, thousands of Chinese shoppers in London this week for Golden Week prove that the mood in London remains overwhelmingly upbeat."

© THE INDEPENDENT

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Topics:  china foreign trade



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