LUXURY giant Kering, which owns fashion houses Gucci and Balenciaga, yesterday said the coronavirus outbreak in China will hit sales trends and tourism flows in one of its major markets.

The company has halted new store openings and ad campaigns in response to the deadly epidemic. in China that has seen cities go into lockdown and shopping districts resemble ghost towns.

Despite the stark warning, Kering posted stronger-than-expected sales for the fourth quarter, boosted by its flagship brand Gucci.

Shares in Paris-listed Kering closed up 6.3 per cent yesterday.

However, the numbers for that quarter were boosted in part by mainland China sales before the outbreak, which had offset a decline in Hong Kong revenue affected by the pro-democracy protests there.

For the three months to 31 December Kering posted revenue of €4.36bn (£3.67bn), up 11.4 per cent on a likefor-like basis, which strips out currency changes.

That was broadly in line with its performance in the quarter prior and ahead of analyst expectations, despite sales halving in Hong Kong, according to the luxury giant's boss Jean-Marc Duplaix.

For the full year Kering posted global revenues of €15.8bn, up 13.3 per cent on a like-for-like basis compared to 2018.

However, net profit sunk 37.7 per cent to €2.3bn after the company had to pay a one-off tax fee to the Italian government. Kering is the latest in a string of luxury brands to be affected by the virus, including Burberry and Capri.

(c) 2020 City A.M., source Newspaper