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Burberry braces for impact of China slowdown

British luxury brand Burberry is expected to reveal a drop in operating profits this week, as the Chinese market slows.

According to The Sunday Times, the City expects Burberry’s annual sales to be unchanged at £2.72bn, but for operating profit to drop 5% to £442m.

It is estimated that 40% of Burberry’s sales come from Chinese shoppers globall, and the market in China has experienced a period of uncertainty in part thanks to the escalating trade war with the US.

In its most recent set of results, Burberry reported flat sales for the first 13 weeks to 29 December 2018. Retail revenues edged down 1% to £711m, but like-for-like store sales rose 1%.

The business is undergoing a repositioning led by chief executive Marco Gobbetti and creative director Riccardo Tisci, who showed his first collection for the brand at London Fashion week in September 2018.

Plans include remodelling key flagship stores and pulling back from “non-luxury” wholesale accounts.

Burberry will report its full year figures later this week.

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