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Burberry shares up despite poor performance in China

Published:  15 Oct at 9 AM

Burberry has seen an increase in the price of its shares even though the fashion house has also recorded a drop in demand in China, one of the company’s key growth markets. Stock was up 13 per cent on news that other markets remained strong. For the half-year ending in September underlying revenues rose by eight per cent compared to that same time last year to £883 million.

At the beginning of September Burberry issued a profit warning after sales in China slowed which came as a surprise to investors and saw share prices dive by 19 per cent. Angela Ahrendts, the firm’s chief executive, encouraged shareholders by saying that although performance continued to be slow in China, during the last quarter is was still marginally positive.

Burberry has also confirmed that it will be bringing its beauty and perfume products in-house. As of April 2013 the firm will take back its distribution, logistics and sourcing operations from Interparfums which currently holds the licence.

Although there has been a significant bounce back in the price of shares, they are still trading below the level they were at before Burberry issued its profit warning. The company said that sales had been particularly strong in France, Germany and Hong Kong. However performance is still weak in the UK.

In the past six months 13 new stores have been opened in Hong Kong, Rome, Milan, and on Regent Street in London.