British fashion house Burberry has warned of a second consecutive year of falling profits, with weakness across Asian markets continuing to weigh heavily on the iconic trenchcoat maker’s financial performance.
Chief Executive Officer Christopher Bailey will see his pay reduced as part of a broader cost-cutting response to the downturn, with other staff across the group also facing salary reductions as the company looks to manage the impact of slowing demand.
The profit warning points to ongoing difficulties in China, which has been a critical growth market for luxury brands in recent years. A cooldown in consumer spending across the region has hit high-end fashion houses particularly hard, with Burberry among those most exposed given its significant presence and reliance on Asian sales.
The news marks a challenging period for the London-listed group, which built much of its recent expansion strategy around appetite for luxury British heritage brands among Chinese consumers. That demand has softened considerably, leaving Burberry and its peers reassessing their outlook for the region in the near term.
Investors will be watching closely to see whether the company’s difficulties reflect a short-term correction in the Chinese market or a more prolonged structural shift in luxury spending habits across Asia.
