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Protests in Hong Kong could cause $120 million in losses to Burberry

Protests in Hong Kong could cause $120 million in losses to Burberry

The sales of the British company Burberry, specialized in luxury, could be affected by losses of 120 million dollars, given the various demonstrations in Hong Kong in favour of democracy.

By Luxus Plus

After several months of demonstrations in Hong Kong, the economic consequences seem to be spreading and affecting mainly the tourism and retail sector. The demonstrators are demanding, among other things, free elections and an investigation into the misconduct of the local police.

However, it was stated that 50% of the losses incurred by Burberry could be covered by sales in Europe and the rest of the Asian region. Indeed, there are currently 10 Burberry stores in Hong Kong that account for 8% of the British company’s total sales.

The majority of Burberry’s stock is made up of seasonal ready-to-wear. Unfortunately, the consequence is that the remaining products will have to be sold at a discount, which will lead to a significant drop in turnover, losses on sales or excessive stocks. Flavio Cereda, analyst at Jefferies, said the solution was to stop delivering products to Hong Kong or reduce the quantities available.

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These many long-term consequences could also lead to stock closures for Burberry and other luxury Houses.

 

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