Fashion retailer Burberry closes a THIRD of its Chinese stores because of killer coronavirus

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The fashion retailer Burberry has closed a third of its Chinese stores amid the killer coronavirus outbreak. 

Of Burberry’s 64 shops, 24 have temporarily closed to protect staff in the disease-hit country, where more than 31,200 are infected.

China is big business for designer labels. But demand for costly trench coats and scarves has plummeted as a result, leaving Burberry fearing for its profits.

The situation is ‘more serious’ than the Hong Kong protests, Burberry’s financial officer said, when sales halved.

Estee Lauder, Michael Kors, Versace and Ralph Lauren have also forecast weeks of poor sales as a result of the rapidly growing outbreak. 

Earlier this week, Apple shut all 42 of its stores in China for at least eight days, and denim retailer Levi’s and sports brand Nike have shut about half their stores.

Luxury brands are facing the brunt of the coronavirus outbreak across the world because Chinese nationals and tourists contribute a huge sum of money to their businesses.

Chinese spending globally accounts for 40 per cent of Burberry’s retail sales, a company spokeswoman said, in line with the average for the luxury sector as a whole. 

Burberry said it was taking action to ensure that staff remained safe – the new coronavirus is highly contagious and can be spread via a cough or sneeze.

But it warned investors that the outbreak was having a ‘material negative effect’ on demand for luxury products, famous for the trademark check print.

Burberry also told shareholders that the effects on full-year financial results would be limited as the period is almost over.

The business also relies on strong sales to Chinese tourists in Europe, and elsewhere. 

In Paris, Chinese trippers spent €265billion ($290 billion and £224billion) on durable luxury goods such as handbags and clothes in 2018. 

It said these sales have so far held up better, ‘but given widening travel restrictions, we anticipate these to worsen over the coming weeks’.

Chief executive of Burberry Marco Gobbetti said: ‘The outbreak of the coronavirus in mainland China is having a material negative effect on luxury demand. 

‘While we cannot currently predict how long this situation will last, we remain confident in our strategy.

‘In the meantime, we are taking mitigating actions and every precaution to help ensure the safety and wellbeing of our employees. 

‘We are extremely grateful for the incredible effort of our teams and our immediate thoughts are with the people directly impacted by this global health emergency.’   

It is not the first time that Burberry has been hit by major events in the region in the last 12 months.

The retailer has taken a serious hit from the anti-government protests in Hong Kong. Its stores in the city state used to account for around eight per cent of global sales, but this dropped to around four per cent.

That has since halved because Chinese tourists elected not to cross to the island while protesters were on the streets.

Burberry chief financial officer Julie Brown said the situation for Burberry stores in Hong Kong is ‘more serious than the protests’, Financial Times reports.

Ralph Lauren has also been hit, shutting about half of its 110 stores in China, while jewellery maker Pandora said business in the country was at a standstill.

Apple has shut all 42 of its stores in China for at least eight days until February 9 as a result of the spreading virus. 

China is the company’s third biggest market in terms of sales behind the United States and Europe and it is also where most iPhones and other devices are made. 

Denim label Levi’s has shut about half of its stores in China, Chief Financial Officer Harmit Singh said on January 30. ‘It will put a dampener on our growth objectives in the near term,’ Mr Singh told Reuters.

Footwear brand Nike shut about half of its stores in China due to the outbreak this week. The company said Tuesday the coronavirus outbreak in China would have a financial impact, sending the footwear maker’s shares down three per cent.

Estee Lauder, Michael Kors, Versace and Jimmy Choo, all cut their profit forecasts for the year in response to growing numbers of cases in China.

More than 630 people have died in China’s coronavirus outbreak as of Friday February 7.

On Thursday a whistleblower doctor who was among the first to sound the alarm on the deadly virus succumbed to the illness. 

China has sealed off cities, cancelled flights and closed factories to try to contain the virus. The capital of Beijing resembles a ghost town, with main thoroughfares and tourist spots almost deserted. 

Sixteen countries, including the US, Australia, New Zealand and Saudi Arabia, have taken firm action to block travellers coming from China. 

Leading British scientists today called for the Government to follow suit, and implement a blanket ban on all travellers from China to the UK until the world develops a vaccine against the deadly coronavirus.

Scores of travellers from China and other coronavirus-hit parts of Asia have been pouring into Britain every day without being properly tested for the infection.

One British man who got his family on the ‘last available Air China flight to UK’ blasted the Government as ‘passive’ and revealed he simply strolled through Heathrow unchecked.

In other developments to the escalating outbreak today: 

Someone who is infected with the Wuhan coronavirus can spread it with just a simple cough or a sneeze, scientists say.

At least 566 people with the virus are now confirmed to have died and more than 28,200 have been infected in at least 28 countries and regions. But experts predict the true number of people with the disease could be 100,000, or even as high as 350,000 in Wuhan alone, as they warn it may kill as many as two in 100 cases.  Here’s what we know so far:

 

A coronavirus is a type of virus which can cause illness in animals and people. Viruses break into cells inside their host and use them to reproduce itself and disrupt the body’s normal functions. Coronaviruses are named after the Latin word ‘corona’, which means crown, because they are encased by a spiked shell which resembles a royal crown.

The coronavirus from Wuhan is one which has never been seen before this outbreak. It is currently named 2019-nCoV, and does not have a more detailed name because so little is known about it.

Dr Helena Maier, from the Pirbright Institute, said: ‘Coronaviruses are a family of viruses that infect a wide range of different species including humans, cattle, pigs, chickens, dogs, cats and wild animals. 

‘Until this new coronavirus was identified, there were only six different coronaviruses known to infect humans. Four of these cause a mild common cold-type illness, but since 2002 there has been the emergence of two new coronaviruses that can infect humans and result in more severe disease (Severe acute respiratory syndrome (SARS) and Middle East respiratory syndrome (MERS) coronaviruses). 

‘Coronaviruses are known to be able to occasionally jump from one species to another and that is what happened in the case of SARS, MERS and the new coronavirus. The animal origin of the new coronavirus is not yet known.’ 

The first human cases were publicly reported from the Chinese city of Wuhan, where approximately 11million people live, after medics first started seeing infections on December 31.

By January 8, 59 suspected cases had been reported and seven people were in critical condition. Tests were developed for the new virus and recorded cases started to surge.

The first person died that week and, by January 16, two were dead and 41 cases were confirmed. The next day, scientists predicted that 1,700 people had become infected, possibly up to 7,000.

Just a week after that, there had been more than 800 confirmed cases and those same scientists estimated that some 4,000 – possibly 9,700 – were infected in Wuhan alone. By that point, 26 people had died.

By January 27, more than 2,800 people were confirmed to have been infected, 81 had died, and estimates of the total number of cases ranged from 100,000 to 350,000 in Wuhan alone.

By January 29, the number of deaths had risen to 132 and cases were in excess of 6,000.  

According to scientists, the virus has almost certainly come from bats. Coronaviruses in general tend to originate in animals – the similar SARS and MERS viruses are believed to have originated in civet cats and camels, respectively.

The first cases of the virus in Wuhan came from people visiting or working in a live animal market in the city, which has since been closed down for investigation.

Although the market is officially a seafood market, other dead and living animals were being sold there, including wolf cubs, salamanders, snakes, peacocks, porcupines and camel meat. 

A study by the Wuhan Institute of Virology, published in February 2020 in the scientific journal Nature, found that the genetic make-up virus samples found in patients in China is 96 per cent similar to a coronavirus they found in bats.

There may have been an animal which acted as a middle-man, contracting it from a bat before then transmitting it to a human, researchers suggested, although details of this are less clear.

Dr Michael Skinner, a virologist at Imperial College London, was not involved with the research but said: ‘The discovery definitely places the origin of nCoV in bats in China.

‘We still do not know whether another species served as an intermediate host to amplify the virus, and possibly even to bring it to the market, nor what species that host might have been.’  

Experts say the international community is concerned about the virus because so little is known about it and it appears to be spreading quickly.

It is similar to SARS, which infected 8,000 people and killed nearly 800 in an outbreak in Asia in 2003, in that it is a type of coronavirus which infects humans’ lungs.  

Another reason for concern is that nobody has any immunity to the virus because they’ve never encountered it before. This means it may be able to cause more damage than viruses we come across often, like the flu or common cold.

Speaking at a briefing in January, Oxford University professor, Dr Peter Horby, said: ‘Novel viruses can spread much faster through the population than viruses which circulate all the time because we have no immunity to them.

‘Most seasonal flu viruses have a case fatality rate of less than one in 1,000 people. Here we’re talking about a virus where we don’t understand fully the severity spectrum but it’s possible the case fatality rate could be as high as two per cent.’

If the death rate is truly two per cent, that means two out of every 100 patients who get it will die. 

‘My feeling is it’s lower,’ Dr Horby added. ‘We’re probably missing this iceberg of milder cases. But that’s the current circumstance we’re in.

‘Two per cent case fatality rate is comparable to the Spanish Flu pandemic in 1918 so it is a significant concern globally.’

The illness can spread between people just through coughs and sneezes, making it an extremely contagious infection. And it may also spread even before someone has symptoms.

It is believed to travel in the saliva and even through water in the eyes, therefore close contact, kissing, and sharing cutlery or utensils are all risky. 

Originally, people were thought to be catching it from a live animal market in Wuhan city. But cases soon began to emerge in people who had never been there, which forced medics to realise it was spreading from person to person.

There is now evidence that it can spread third hand – to someone from a person who caught it from another person.

Once someone has caught the virus it may take between two and 14 days for them to show any symptoms – but they may still be contagious during this time.

If and when they do become ill, typical signs include a runny nose, a cough, sore throat and a fever (high temperature). The vast majority of patients – at least 97 per cent, based on available data – will recover from these without any issues or medical help.

In a small group of patients, who seem mainly to be the elderly or those with long-term illnesses, it can lead to pneumonia. Pneumonia is an infection in which the insides of the lungs swell up and fill with fluid. It makes it increasingly difficult to breathe and, if left untreated, can be fatal and suffocate people.

 

Scientists in China have recorded the genetic sequences of around 19 strains of the virus and released them to experts working around the world. 

This allows others to study them, develop tests and potentially look into treating the illness they cause.   

Examinations have revealed the coronavirus did not change much – changing is known as mutating – much during the early stages of its spread.

However, the director-general of China’s Center for Disease Control and Prevention, Gao Fu, yesterday said the virus was mutating and adapting as it spread through people.

This means efforts to study the virus and to potentially control it may be made extra difficult because the virus might look different every time scientists analyse it.   

More study may be able to reveal whether the virus first infected a small number of people then change and spread from them, or whether there were various versions of the virus coming from animals which have developed separately.

The virus has so far killed 566 people out of a total of at least 28,000 officially confirmed cases – a death rate of around two per cent. This is a similar death rate to the Spanish Flu outbreak which, in 1918, went on to kill around 50million people.

However, experts say the true number of patients is likely considerably higher and therefore the death rate considerably lower. Imperial College London researchers estimate that there were 4,000 (up to 9,700) cases in Wuhan city alone up to January 18 – officially there were only 444 there to date. If cases are in fact 100 times more common than the official figures, the virus may be far less dangerous than currently believed.

Experts say it is likely only the most seriously ill patients are seeking help and are therefore recorded – the vast majority will have only mild, cold-like symptoms. For those whose conditions do become more severe, there is a risk of developing pneumonia which can destroy the lungs and kill you.

 

The Wuhan coronavirus cannot currently be cured and it is proving difficult to contain.

Antibiotics do not work against viruses, so they are out of the question. Antiviral drugs can, but the process of understanding a virus then developing and producing drugs to treat it would take years and huge amounts of money.

No vaccine exists for the coronavirus yet and it’s not likely one will be developed in time to be of any use in this outbreak, for similar reasons to the above.

The National Institutes of Health in the US, and Baylor University in Waco, Texas, say they are working on a vaccine based on what they know about coronaviruses in general, using information from the SARS outbreak. But this may take a year or more to develop, according to Pharmaceutical Technology.

Currently, governments and health authorities are working to contain the virus and to care for patients who are sick and stop them infecting other people.

People who catch the illness are being quarantined in hospitals, where their symptoms can be treated and they will be away from the uninfected public.

And airports around the world are putting in place screening measures such as having doctors on-site, taking people’s temperatures to check for fevers and using thermal screening to spot those who might be ill (infection causes a raised temperature).

However, it can take weeks for symptoms to appear, so there is only a small likelihood that patients will be spotted up in an airport.

   

The outbreak is an epidemic, which is when a disease takes hold of one community such as a country or region. 

Although it has spread to dozens of countries, the outbreak is not yet classed as a pandemic, which is defined by the World Health Organization as the ‘worldwide spread of a new disease’.

The head of WHO’s global infectious hazard preparedness, Dr Sylvie Briand, said: ‘Currently we are not in a pandemic. We are at the phase where it is an epidemic with multiple foci, and we try to extinguish the transmission in each of these foci,’ the Guardian reported.

She said that most cases outside of Hubei had been ‘spillover’ from the epicentre, so the disease wasn’t actually spreading actively around the world. 

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