In its first-half earnings, Burberry said sales in Hong Kong dipped in double digits and that they are expected to remain under pressure. But nevertheless, demand for the brand’s Riccardo Tisci collections boosted first-half revenues and profits.
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Demand for air travel into Hong Kong remained weak, with Cathay Pacific’s inbound passenger traffic seeing a year-on-year decline of 35 per cent.
“Mainland China routes in particular felt significant pressure with weak travel sentiment to Hong Kong by mainland tourists,” the Hong-Kong flag carrier said.
As a result, the airline has cut passenger capacity by 6-7 per cent for November and December and lowered its profit guidance for the second time in less than a month.
The protests, which started in June, have seen Hong Kong officially enter a recession in the third quarter, as tourists, particularly from mainland China, avoid visiting the city and retailers shut up shop during the demonstrations.
Burberry’s chief operating and financial officer Julie Brown said in a conference call that the group is talks with the landlords to secure a reduction in rental levels, given the significant drop in business.
Despite the setbacks in Hong Kong, the fashion house known for its trench coats posted better-than-expected first-half earnings and said it remains on track to achieve full-year results as forecast.
Burberry shares, which jumped 8.6 per cent in early trade in London, were up 5 per cent at £2,167 in mid-morning trading.
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