UPDATE 1-Burberry confirms revenue slowdown

Thu Oct 11, 2012 2:29am EDT

* Q2 comparable retail sales up 1 pct vs Q1 up 6 pct

* H1 total revenue up underlying 8 pct

* Says UK and China have slowed

* To directly operate fragrance and beauty products

LONDON, Oct 11 (Reuters) - British fashion house Burberry , which warned on profit last month, confirmed retail sales growth slowed sharply in its second quarter as demand eased in the UK and China.

Burberry, famous for its raincoats lined with a distinctive camel, red and black check pattern, also said on Thursday it will directly operate fragrance and beauty product categories following the end of its existing licence relationship with Interparfums SA.

The group said sales at stores open over a year rose 1 percent in the three months to Sept. 30, its fiscal second quarter.

That compares with first quarter growth of 6 percent and zero growth in the first 10 weeks of the second quarter, which Burberry disclosed on Sept. 11.

Last month's warning from Burberry, which sent its shares down over 20 percent, was the clearest sign yet that a slowdown in China and fallout from Europe's debt crisis was bringing a nearly three-year boom in demand for luxury goods to an end.

Burberry said total first half revenue was 883 million pounds ($1.41 billion), up 8 percent at constant exchange rates, with first quarter growth of 11 percent slowing to 5 percent in the second quarter.

It said that while trading in the UK and China slowed it remained robust in Hong Kong, France and Germany.

For the second half Burberry expects retail selling space to increase by about 14 percent.

It forecast second half underlying wholesale revenue to be broadly unchanged year-on-year and forecast unchanged licensing revenue for the 2012/13 year as a whole.

Shares in Burberry closed Wednesday at 1,016 pence, valuing the business at 4.49 billion pounds.

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