Wed. Sep 30th, 2020

Hong Kong protests hit Burberry and Cathay Pacific

The fashion house’s sales fell in Hong Hong while the airline said the civil unrest had hit demand.

Two companies with major operations in Hong Kong have revealed the financial impact of violent protests in the City.

Luxury fashion house Burberry said Hong Kong sales had fallen sharply and would “remain under pressure”.

Airline Cathay Pacific said the civil unrest had “been exceptionally challenging, severely impacting demand and operations of the business”.

The anti-government protests have gripped Hong Kong for five months and rattled stock markets.

Protecting staff

Burberry said it had seen a “double digit” percentage decline in sales in Hong Kong – where it has 10 shops and usually generates about 8% of its sales.

However, its share of sales from Hong Kong fell to 5% in the latest quarter and chief financial officer Julie Brown said the group had been forced to close some stores to keep staff safe, although none had been damaged.

The retailer said it had written down the value of its stores in Hong Kong by £14m.

Despite this, total sales across the Burberry group rose 5% in the six months to 28 September. Marco Gobbetti, Burberry’s chief executive, said the results were in line with the guidance earlier in the year despite the disruption in Hong Kong, and the retailer’s shares climbed 5% in response.

Mr Gobbetti has been taking Burberry further upmarket since he took the helm two years ago and said the new collection from its chief creative officer Riccardo Tisci was generating “strong double digit growth”.

credits: bbc news, photo, latimes


https://www.bbc.com/news/business-50416316

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