BURBERRY falling Down!!

Indeed... The market is changing, and so are the market players!

Luxury goods maker Burberry shocked the markets on Wednesday with a warning that sales had stalled in the clearest sign yet that slowing demand from China is having an impact on the booming sector.

The profit warning wiped £1bn off Burberry's market value, sending shares in the 156-year-old fashion house down nearly 21% to £10.87. Following disappointment from Coach and Ralph Lauren in recent weeks, this is the first major disappointment for European luxury brands, analysts said. The shine has also come off sales at New York-based jeweller Tiffany, with Europeans and Asians buying fewer $65,000 (£40,000) diamond necklaces and $10,000 amethyst earrings.

Experts predict the global slowdown will prompt the rise of more affordable luxury lines and lead to Chinese shoppers becoming more discerning in what they buy.

Burberry, known for its trademark camel, red and black check, said like-for-like sales ground to a halt in the 10 weeks to 8 September and have started to fall in recent weeks. Total sales including new space were up 6%. It warned that profits before tax for the year to March 2013 would be at the lower end of City expectations, which ranged from £407m to £455m.

Burberry's chief executive Angela Ahrendts said: "As we stated in July, the external environment is becoming more challenging."

Sales of luxury goods in China tripled in value in the last five years, according to Euromonitor International. Its burgeoning middle classes have become key clientele for Burberry and other international luxury brands including France's LVMH, Hermes and Gucci owner PPR, splurging on western designer fashion and handbags.

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