Burberry are forced into savings drive as sales cool
Trendy trench coat maker Burberry said it will ramp up cost savings to offset slowing sales growth as China's economic woes continue to hit demand for luxury goods.
The fashion house said trading worsened in its second quarter, with underlying retail revenues rising by 2% in the six months to September 30 - a marked fall on the 8% growth in the first half.
Like-for-like sales edged up 1% overall in the half-year, but fell 4% in the second quarter, and the group saw a "mid single digit" drop across Asia Pacific as Chinese customers in particular reined in spending. Retail analysts have cut their full-year profit forecast, with expectations falling from £462m to £445m.
Burberry said annual profits would be "broadly" in line with the recently trimmed forecasts, but this takes into account action to cut costs across the group.
It also assumes a reduction in staff bonuses. Burberry shares fell as much as 12%.