Burberry shows why you should avoid the luxury goods sector

Burberry's profit warning is likely to be just the first in the sector as China's economy runs out of steam. John Stepek explains why, and how to protect your wealth.

We've been negative on the luxury goods sector for a while now. So hopefully you weren't one of the shareholders in Burberry who got a nasty shock yesterday.

The fashion brand saw its share price tank by 21%, as it warned that a slowdown in sales would hit profits. Sales at stores open for at least a year were flat, and have turned negative in recent weeks.

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John Stepek

John Stepek is a senior reporter at Bloomberg News and a former editor of MoneyWeek magazine. He graduated from Strathclyde University with a degree in psychology in 1996 and has always been fascinated by the gap between the way the market works in theory and the way it works in practice, and by how our deep-rooted instincts work against our best interests as investors.

He started out in journalism by writing articles about the specific business challenges facing family firms. In 2003, he took a job on the finance desk of Teletext, where he spent two years covering the markets and breaking financial news.

His work has been published in Families in Business, Shares magazine, Spear's Magazine, The Sunday Times, and The Spectator among others. He has also appeared as an expert commentator on BBC Radio 4's Today programme, BBC Radio Scotland, Newsnight, Daily Politics and Bloomberg. His first book, on contrarian investing, The Sceptical Investor, was released in March 2019. You can follow John on Twitter at @john_stepek.