After Prada, Salvatore Ferragamo and Burburry comes luxury retailing group
IT Hong Kong, who today issued a profit warning after incurring a foreign
exchange loss of nearly 8 million US dollars as the Renminbi depreciates.

Burberry on Tuesday saw its shares fall 4.4 percent as a result. The
company operates 65 stores in mainland China, which accounts for about 14
percent of the company’s sales. The weaker yuan makes imports more
expensive, and shares fell on concerns about export demand for luxury goods
makers.

China is the second biggest supplier of UK goods imports, and fashion
exports are increasing every season, so the there will an impact for
British business that export abroad and rely on Chinese orders.

One benefit to the UK out of the current devaluation is its ability to
continue to export services and high value-added manufacturing goods, as
Chinese consumers become more affluent and trade barriers are reduced.

China is already the second biggest export market for the EU (behind the
US) and Britain’s sixth largest overseas market. Investment in the UK by
Chinese companies can provide a further boost.