With the crackdown by the Chinese government on luxury goods hurting the worldwide luxury goods industry, one luxury brand continues to remain confident in China and emerging markets. This was the statement Burberry's CEO shared with CNBC during the London Fashion Week.
According Burberry CEO Angela Ahrendts, in an interview with CNBC, "It's not just Burberry that was affected (by the crackdown), the whole industry was. But Burberry was the only one that was transparent about it but the entire sector was affected."
The incident she referred to was the crackdown conducted by the Chinese Communist Party on luxury purchases and ostentatious extravagance. The government had banned banquets as well as television and radio advertisements for expensive goods.
The market was surprised whrn Burberry announced that its expected 2012 sales and profits would come in slow and below its projected earnings. A large part of the sales of the luxury goods firm comes from the Asia Pacific region, which is about 37% of the group's GBP2 billion or USD3.18 billion in revenues for the year ending March 2013.
Despite the conditions, Ahrendts was confident that the Chinese demand for luxury goods would increase. She adds, "It's the new normal and we've budgeted for it. I think that people forget that in the next year 100 million customers will exit that country and travel to flagship markets all over the world."
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