British Luxury Brand Burberry Closes Guangzhou Plant

Britain has just been hit by the "earnings warning" storm

Burberry (Burberry) recently announced the closure of a factory in Guangzhou, mainly due to the fact that the factory was seriously more than the industry standard.

Affected by China's economic slowdown, the sales performance of the brand in China has also declined sharply.

For Burberry is located

The foundries were closed, and reporters learned yesterday that the main reason is that workers' working hours and working environment standards failed to meet the standards.

According to people familiar with the matter, employees of the factory had held a 4 day strike to protest against low wages, long hours of work force and verbal insults from management.

It is reported that

The brand joined the British ethics Trade Organization in June 2010, and the employee's working hours should not exceed 48 hours a week.

"According to the survey, the workers in the factory work for more than 11 hours a day, 6 days a week, equivalent to 66 hours per week, far exceeding the standard."

The person familiar with the matter said.

"We apologize for this. We still have a lot of problems to improve."

Burberry's Brand Company responsible department yesterday acknowledged in a reply to the journalist's e-mail that the factory had indeed violated the moral standards that the brand has always followed in terms of production environment and management system.

"However, the closure of the factory in China will not affect Burberry's sales in China."

Burberry Brand Company marketing department yesterday pointed out that "it is just one of Burberry's many factories in China, and the last batch of products produced by Burberry for Burberry has also been delivered in July."

In addition, the reporter did not reply to the reporter's "whether the closure of the Chinese factory is still related to the sharp decline in sales performance of Burberry in China".

As a matter of fact, China has been seen as an engine of growth in Burberry's brand performance in recent years.

However, since the first quarter of this year, Burberry's performance in mainland China has shown a downward trend.

According to the first quarter results of Burberry group in 2012, sales in the Asia Pacific region mainly focused on China in the first quarter, and sales growth dropped to 16% from 67% in the same period last year.

According to a statement recently issued by the group, its sales for more than a year, the third quarter of this year increased by zero in the 10 week ended September 8th, far below the same store sales growth of 6% in the second quarter ended June 30th.

"This year, the slowdown in Burberry's sales in China has a lot to do with the slowdown in the domestic economy."

Zhou Ting, Dean of luxury research and President of the Institute of wealth and quality research, told reporters yesterday that consumer confidence has declined. Another reason is that China's luxury consumer market has been developing for nearly 10 years. In the first tier cities, consumers who frequently and steadily buy luxury goods also have a mature and rational growth process.

According to the survey, in 2012, about 30% of the Chinese tycoons said they would reduce their spending on luxury goods, and the average middle income of the Chinese middle class with an annual salary of 160 thousand -18 yuan was even more obvious in this regard.

"In addition, with the decline of China's economy, China's fiscal revenue increased to 4.2% in August this year, and the central government's revenue was a rare negative growth, which forced our government to limit public expenditure to a certain extent.

In addition, in June this year, the first time that China's public funds were not allowed to purchase luxury goods regulations, the demand for luxury goods such as gold, jewellery and luxury watches was partially suppressed.

People in related industries say.

Nevertheless, Burberry remains optimistic about its market in China.

Cartwright, chief financial officer of Burberry, recently made clear that "although China's economic indicators have worsened, Chinese consumers still have strong consumer desire, and there are still huge business opportunities in the Chinese market."

It is reported that Burberry has opened 63 stores in China and plans to expand to 100 in the future.