The outbreak of cornavirus has scuttled Burberry’s plans to drive growth in China this year and is impacting its retail sales. Sales in Hong Kong already saw significant drop last year due to protests as sales halved in the third quarter. Around 40 per cent of Burberry sales are from Chinese customers. Almost 25 of the brand’s 64 stores in Mainland China are closed at the moment. Its remaining Chinese stores are operating with reduced hours and seeing significant decline in footfalls. In some ways, the company is trying to take a business-as-usual approach and intends to continue its key growth initiatives in preparation for a recovery in luxury demand. The firm is confident in its strategy and is pleased with the positive response to its brand repositioning and new product. It will continue to focus on newness and fashion, and on inspiring and engaging its customers globally.

Spending patterns of Chinese customers in Europe and other tourist destinations are anticipated to worsen over coming weeks. Those Chinese tourists who travelled before the outbreak led to mass trip cancellations are still spending. But when they return home, there will be fewer tourists replacing them so the big impact for stores in Europe could come later this month and in March.