Why now is the time to back Burberry

European leader in digital luxury development

The increased market volatility that accompanied the panicked sell-off earlier this year created numerous areas of opportunity for investors, with one such example for us being exploiting the negative sentiment towards luxury goods stocks via the initiation of a position in Burberry.

With one in three luxury goods being bought by the Chinese, this is an industry especially sensitive to developments within China. Luxury goods consumption in Hong Kong and Macau has been in decline for well over a year now - the Hong Kong dollar's peg to the US dollar is making prices less compelling than in Japan or South Korea and as a consequence tourist numbers have dropped substantially, while anti-corruption continues to negatively impact Macau. Burberry has also suffered an unfavourable geographic mix, notably its sector leading overweight exposure to Hong Kong at 10% of reven...