Burberry, purveyor of fancy trench coats and lovely scarves, is having a little trouble in China.
Sales at the London-based company were up for the most part in the six months ended Sept. 30, the only blemish being its Asia-Pacific division, where revenue fell 2% (pdf) from the same six months last year.
Investors didn’t take the news kindly, sending the clothier’s shares down as much as 12.5% in early trading with some recovery later in the session.
Like many fashion houses, Burberry gets a big chunk (35%) of its revenue from Asia, and most of that comes from China. But between the country’s stock market volatility, recent currency devaluation, and slowing GDP growth, luxury shoppers are splurging a little less than usual, especially in Macau and Hong Kong.
Interestingly, Burberry had a banner six months in Japan, where revenue at locations open at least a year jumped by more than 50%, despite the Japanese economy’s own sluggishness. Still, Japan accounts for just 2% of global retail and wholesale sales for Burberry, meaning the company still has a big problem in Asia.