China slowdown curbs Burberry growth China's economic slowdown and financial woes in the US have slowed first-quarter growth at Burberry, causing the British luxury fashion brand to miss analysts" sales estimates. The maker of high-end trenchcoats and handbags on Wednesday reported an 11 per cent year-on-year increase in first-quarter revenues to £408m, undershooting analysts" forecasts of £418m. Although many of the UK's struggling retailers would be content with 11 per cent growth, the figure is down on the 30 per cent increase reported in the same period a year ago, and further highlighted the impact of the economic slowdown in China. The news dragged down Burberry shares 5 per cent to £12.18 in early London trading. The slowdown in the growth of Chinese consumption meant that Burberry's same-store sale growth halved in the three months to June 30, from 30 per cent last year to "the mid-teens" this year, according to Stacey Cartwright, chief financial officer. She denied that the market was approaching saturation and said Burberry could have as many as 100 stores in the country compared with 63 today. "We still see enormous opportunity in China, where the bulk of our stores were inherited from our former franchisee and they have on average 2,000 square feet per store," she said . "We are aiming to increase average store space to 3,500-4,000 sq ft at a minimum." The fashion house, famous for its distinctive check designs, has become increasingly reliant on emerging markets amid the sluggish economic recoveries in the US and Europe. Ms Cartwright said Burberry had responded with what it called "a clean-up programme" of axing cheaper fashion lines to buoy average selling prices. We were offering trenchcoats with a less desirable fabrication that wasn't woven in our own mills in the north of England. It's much better to focus on British-made," she said, adding that the entry level price for a trenchcoat had been increased to about £1,000. The 156-year-old company has raised its expenditure on improving its larger stores in locations such as London and New York, targeting affluent visitors from emerging market economies. The group is poised to open further stores in Milan, Chicago, Hong Kong and Shanghai, and it has earmarked £180m-£200m for capital expenditure this year on floorspace, bigger flagship stores and digital innovation. The increase in its online presence has become an important part of Burberry's expansion strategy, with increasing numbers of its customers visiting Burberry World - the fashion house's website - which includes an internet store, catwalk shows, social networking and music. "In terms of regions, the Americas is Burberry's weakest, as the rationalisation of wholesale accounts continues - this could provide fuel for the bears," said Bethany Hocking, an analyst at Investec.