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Burberry H1 sales lift just 4 percent after marked Q2 slowdown in Korea, mainland China

British luxury marque Burberry said revenues for the first half rose 4 percent to GBP 1.396 billion (USD 1.74 billion), with Asia Pacific sales up double digits for the 26-week period, despite a slowdown in the second quarter in Korea and mainland China.

SEE ALSO: Burberry Asia revenues up double-digits in all markets

Burberry Asia Pacific revenues grew 18 percent in the first half with a strong first-quarter recovery of 36 percent against a period that saw Covid-19 related disruption in mainland China. However, that grow slowed to 2 percent in the second quarter against a tougher comparative, according to the London-based brand.

Mainland China comparable store sales increased 15 percent in the first half, which fell 8 percent in the second quarter as spending shifted offshore, although the Chinese customer group grew 25 percent.

South Korea sales fell 1 percent in the first half with a robust 6 percent growth in the first half offset by a 7 percent decline in the second quarter. Finally, Japan saw strong comparable store sales growth of  43 percent in the first half, and 41 percent in the second quarter driven by tourists, while South Asia Pacific rose 30 percent in the first half and 22 percent in the second quarter, also benefiting from tourist demand, said Burberry.

By category, Burberry said it registered a “good performance” across core outerwear and leather goods categories during the six months ending September 30. Outerwear comparable store sales were up 21 percent in the first half and 10 percent in the second quarter, while leather goods comparable store sales grew 8 percent in the first half and 3 percent in the second quarter.

For the first half, adjusted operating profit was down 6 percent to GBP 223 million, although it rose 1 percent at constant exchange rates.

“We made good progress against our strategic goals, executing our priorities at pace. We continued to build momentum around our new creative vision with the launch of our Winter 23 collection in September, the first designed by Daniel Lee,” said Jonathan Akeroyd, chief executive officer, Burberry.

“While the macroeconomic environment has become more challenging recently, we are confident in our strategy to realise our potential as the modern British luxury brand, and we remain committed to achieving our medium and long-term targets.”

Last month, luxury giants LVMH and Kering reported a slowdown in total sales for the third quarter ending September 30, along with Italy’s Salvatore Ferragamo, with the trio noting a slower-than-expected spend by luxury consumers, including across Asia.

Most recently, Richemont last week reported a 6 percent uptick in sales for the first half, uniquely defying the luxury slowdown in Asia Pacific, where sales rose by 14 percent, fuelled by a 23 percent progression in mainland China, Hong Kong and Macau combined.