Burberry sees its profit weighed down by pound

[LONDON] Demand for coats and large leather bags helped Burberry top Christmas sales forecasts, though the British luxury brand said that its incoming chief executive might have to cope with a hit to profit from a stronger sterling in the months ahead.

Shares in the 158-year-old firm known for its camel, red and black check pattern rose up to 7.1 per cent yesterday, as investors welcomed the strong sales in an industry jittery about volatile demand in China - until recently its engine of growth. "We believe many markets are still under-penetrated for the brand," HSBC analysts said of Burberry's prospects.

The jury is out on whether sales growth in the luxury goods industry this year will match, drop or slightly outpace the 10 per cent rise recorded last year at constant currencies.