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Burberry a luxury brand from UK, reported signs of improvement in its China and Hong Kong stores.
Burberry, higher end brand house, known for its trench coats, cashmere scarves and ponchos gets 30-40% of its revenue from Hong Kong and greater China. In last quarter, sales had crashed 20% in Hong Kong, due to lack of buying by Chinese tourists, on whom the brand relies a lot and 5% in China. Starting from October, according to Burberry situation has improved.
However, company has warned about challenging environment.
On a separate note, GDP growth reported by Hong Kong showed economy has grown at fastest pace in more than a year. In third quarter GDP grew by 0.9%, after growing 0.4% in second and 0.7% in first.
Hong Kong, whose economy is closely linked with that of China has been experiencing slowdown since 2011, in line with mainland economy.
So recent improvement or stabilization do pose the question - is it a signal for improvement in China?
Surely there are some signs of stability through many economic dockets, but further strong evidence is required to call it a recovery......just like Burberry said - environment is challenging.
