Burberry sales fall as COVID-19 spreads

Burberry sales fall as COVID-19 spreads

Burberry Group plc (LON:BRBY) saw its shares fall on Thursday after the luxury fashion brand updated the market on COVID-19 related business impacts.

Shares in the company were down by over 3% during Thursday morning trade.

Burberry said that trading has “deteriorated significantly” since 24 January.

Over the last six weeks, the company has seen comparable retail store sales decline between 40% to 50%.

In February, sales losses were predominantly recorded in Burberry’s Asian markets.

Currently, over 60% of Burberry stores in Europe, the Middle East and Africa and roughly 85% of stores in the Americas are closed.

Those which remain open are operating with reduced hours and experiencing very weak footfall, the luxury fashion brand said.

During a time when people are being encouraged to stay indoors and self-isolate, it is not wonder footfall has reduced.

Burberry said that, in total, roughly 40% of its directly operated stores across the world are closed, with further closures expected.

Burberry continued to add that comparable retail store sales in the final weeks of its financial year are expected to decline by 70% to 80%.

Many companies have been hit by the evolving COVID-19 outbreak as governments are restricting non-essential travel in order to contain the illness.

“Since our February update, the material negative effect of COVID-19 on luxury demand has intensified and is now impacting the industry in all regions,” Marco Gobbetti, Chief Executive Officer, commented.

“Our primary concern is the global health emergency and we continue to take every precaution to help prevent the spread of the virus and ensure the safety and wellbeing of our employees, partners and customers,” said the Chief Executive Officer.

“We are implementing mitigating actions to contain our costs and protect our financial position, underpinned by our strong balance sheet. We remain confident in our strategy and the strength of our brand and I am exceptionally proud of our teams’ resilience and commitment.”

Shares in Burberry Group plc (LON:BRBY) were down on Thursday, trading at -3.26% as of 09:58 GMT.