Luxury fashion brand Burberry has seen its share price slump 12% after reporting a fall in revenues in Asia.
Overall revenues were steady at £1.1 billion in the first six months of its financial year. But Burberry said trading in China was becoming “increasingly challenging” as sales dipped.
It adds to growing concerns over the strength of the Chinese economy, especially given the current shift of focus towards consumerism. A mammoth manufacturing and export industry has supported much of China’s double-digit growth over the past quarter of a century. But the government is now trying to change the focus of the economy from manufacturing and exports to consumer spending.
Burberry said it would continue to implement cost-cutting measures to offset the affect of falling sales.
“The external environment became more challenging during the half, affecting luxury consumer demand in some of our key markets,” said Burberry boss Christopher Bailey.
“In response, we have intensified our focus on driving sales and productivity, while taking swift action on discretionary costs.”
Despite the disappointing first half of the year, Burberry said it expects sales to pick up in the second half.