Burberry shuts shops over coronavirus and warns on sales

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK

The coronavirus epidemic in China has forced British luxury brand Burberry (BRBY.L) to shut shops in the region.

Burberry said on Friday it had closed 24 of its 64 mainland China stores in the wake of the outbreak of novel coronavirus that has claimed over 600 lives.

Burberry chief executive Marco Gobbetti warned the epidemic was “having a material negative effect on luxury demand”.

“While we cannot currently predict how long this situation will last, we remain confident in our strategy,” Gobbetti said in a statement.

“In the meantime, we are taking mitigating actions and every precaution to help ensure the safety and wellbeing of our employees.

“We are extremely grateful for the incredible effort of our teams and our immediate thoughts are with the people directly impacted by this global health emergency.”

British fashion brand Burberry store in Hong Kong airport. Photo: Geovien So/SOPA Images/LightRocket via Getty Images

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Burberry shares were down 0.9% in London by 9.15am UK time.

China and Hong Kong are huge markets for luxury goods and UBS estimated Burberry gets around 9% of its sales globally from Hong Kong alone. Shares in the luxury retailer have fallen over 13% since late January on fears about coronavirus’s impact on sales.

Shopping has been disrupted by the outbreak of novel coronavirus, which has prompted officials to place millions of people in lockdown across mainland China and introduce travel restrictions.

Burberry joins a growing list of businesses that have seen operations disrupted by the epidemic. Apple (AAPL), Starbucks (SBUX), and McDonald’s (MCD) have all been forced to close stores in China, while the likes of Airbus and Toyota have been forced to shut down factories in the region.

Authorities in China said on Friday that the death toll from coronavirus has now risen to 636 and there are 31,161 confirmed cases across mainland China.

“We fully support the efforts the Chinese government is taking to contain the virus and we are working in close conjunction with local authorities and partners,” Burberry said in a statement Friday.