British fashion brand Burberry has posted a 1 percent rise in third-quarter sales buoyed by growth in China. But as Hayley Platt reports the outlook for the luxury sector remains uncertain.
Burberry's a firm favourite in China. And the British fashion brand says growth there and in Japan and South Korea has helped it achieve a 1 percent rise in third quarter sales, despite weakness in Hong Kong. With so much talk of a China slowdown that surprised some. And shares rose almost five percent before falling back. But the outlook for the 160-year-old company - which makes a third of its revenue from China and Hong Kong - may not be that bright. It's warning of uncertain times for the whole luxury sector. Richard Hunter is from Hargreaves Lansdown. (SOUNDBITE) (English) HARGREAVES LANSDOWN, HEAD OF EQUITIES, RICHARD HUNTER, SAYING: "Consumer spending seems to have hit something of a wall and that's certainly had an impact on those high end retailers doing business in the region let alone tourists coming to the likes of Europe." Some questioned whether Christopher Bailey would cope as CEO and creative chief. But with his help retail revenues have topped 600 million pounds. Like-for-like sales were also unchanged year-on-year, in the previous quarter they fell 4 percent. Carla Buzasi is from fashion forecaster WGSN (SOUNDBITE) (English) WGSN, GLOBAL CHIEF CONTENT OFFICER, CARLA BUZASI, SAYING: "The city looks and says well if you're on the creative side you can't then understand the financial side or if you're on the financial side you can't understand the creative side of the organisation and I think the fashion world is somewhere where certainly in this instance they're proving that maybe that's not the case." Richemont, owner of Cartier, hasn't faired as well. Sales over the crucial Christmas period fell 4 percent - blamed on political tensions in Hong Kong - one of the top markets for Swiss watches. Further falls in oil prices and concerns over global economic growth could mean the luxury market is in for a difficult time.