Burberry feels the pinch as rivals cut prices

SALES growth slowed at luxury goods group Burberry over the third quarter, hit by a combination of weaker consumer spending in Britain and price-cutting by rival fashion chains.

Underlying sales, which exclude the impact of currency movements, were ahead by 7% in the three months to 1 January, a performance described by chief executive Rose Marie Bravo as 'solid'. She expects the group to meet City analysts' full-year profit expectations of up to £160m.

Best sellers over Christmas were charm watch bracelets, small leather accessories and ponchos. For the current season, Burberry's £495 Cinda bag is selling particularly well, with a waiting list at stores.

US retail sales increased in line with space growth, while in Asia, Korea remained 'volatile' and there was 'vigorous' growth in Hong Kong.

{1}The UK market, which accounts for around 10% of group sales, was weak. Finance director Stacey Cartwright said Burberry's popularity with so-called 'chavs', who have hijacked its traditional plaid pattern, 'won't have helped'.

But she added: 'As we move into 2005, it's yesterday's news.' Burberry shares were down 13½p at 404¼p by mid-morning.