News

Burberry has announced plans to reduce its global workforce by 1,700 as part of a strategic cost-cutting initiative aimed at revitalising the business. The luxury British brand is in the early stages of a turnaround plan under the leadership of CEO Joshua Schulman, who took over last year. The decision comes despite Burberry reporting an adjusted operating profit of £26 million (US$34.55 million) for the financial year ending March 29, 2025, significantly surpassing analysts’ expectations of £11 million. Schulman’s strategy marks a shift towards focusing on the brand’s iconic trench coats and scarves, following a period of challenges marked by product missteps, steep price increases, and a broader downturn in the luxury sector. Under his leadership, Burberry aims to reposition itself more effectively within the competitive luxury market. In the fourth quarter, comparable sales fell by 6%, slightly better than the forecasted 7% decline. While this is a sign of progress, the company is taking a cautious approach as it rolls out its autumn and winter collections. Schulman stated that the brand would increase the frequency and reach of its campaigns to capitalise on improved brand sentiment. The geographical breakdown of sales reflects the ongoing challenges facing the brand. Sales in both the Americas and the Europe, Middle East, India, and Africa (EMEIA) region fell by 4% year-on-year, while sales in the Asia-Pacific region dropped by 9%. Schulman’s strategy to boost sales by targeting American consumers could face hurdles, given the uncertain outlook for US consumer spending. While Burberry did not specifically address the impact of US tariffs, it acknowledged that geopolitical developments are contributing to an increasingly uncertain economic landscape. The company did not provide detailed forecasts for the 2026 financial year, opting to focus on stabilising the brand through its ongoing strategic adjustments. -Reuters

Hong Kong’s capital markets are experiencing a robust rebound, with three prominent mainland Chinese and Hong Kong companies announcing plans to raise funds in the city on Wednesday. The surge follows a period of market revitalisation, driven by increased investor confidence and favourable economic conditions. Among the fundraising initiatives, China Petrochemical Corporation (Sinopec) announced that its offshore subsidiary, Deep Development 2025, has received approval to issue HK$7.75 billion (US$990 million) worth of exchangeable bonds in Hong Kong. The seven-year bonds are backed by shares of another Sinopec offshore subsidiary and are intended to refinance the group’s medium and long-term offshore debt. Meanwhile, Shanghai Microport Medbot, a medical equipment manufacturer, is preparing to raise approximately HK$389.62 million through the issuance of 25.1 million new shares at HK$15.50 each. After accounting for fees and expenses, the expected net proceeds of around HK$382.33 million will be allocated to research and development and the replenishment of working capital. Additionally, CSI Properties, a Hong Kong-based property investment firm, plans to allow its subsidiary, ESL, to issue new notes with a three-year maturity. The exact offering amount will be announced later, and the proceeds will be used to optimise CSI’s debt structure and balance sheet. The renewed fundraising activities highlight the ongoing recovery of Hong Kong’s capital markets, which began to rebound in late 2024 following three years of declines. As of April 2025, the total market capitalisation of stocks traded in the city had reached US$38.8 trillion, representing a 21% increase from US$32.1 trillion in the previous year. Trading activity has also surged, with the average daily turnover in April 2025 amounting to US$274.7 billion, marking a 145% increase from the US$112.3 billion recorded a year earlier. This resurgence has created an opportune environment for fundraising, supported by falling interest rates and growing investor interest. This week, Contemporary Amperex Technology, the world’s leading electric vehicle battery maker, launched a dual primary listing in Hong Kong, targeting a potential raise of up to HK$41 billion. If successful, this would be the largest share sale in the city since Kuaishou Technology’s US$6.2 billion initial public offering (IPO) in January 2021. Hong Kong’s capital market recovery has also propelled the city to the third spot globally for IPOs in the first quarter, with 15 companies raising HK$17.7 billion—nearly three times the amount raised during the same period last year, according to KPMG. Kenny Ng Lai-yin, a strategist at Everbright Securities International, attributed the positive fundraising environment to the recovery of capital markets and lower interest rates. The three-month Hong Kong interbank offered rate, currently at its lowest since July 2022, has made debt issuance more attractive. Issuing debt in Hong Kong, according to Ng, provides companies with access to a diverse investor base while enhancing their brand presence on the global stage. -South China Morning Post

The Reserve Bank of India (RBI) is reviewing several digital wallets linked to electric vehicle (EV) companies following the unexpected collapse of BluSmart, the country’s largest all-EV taxi service. The sudden shutdown left users unable to access funds stored in the app’s e-wallet, prompting concerns about the lack of safeguards for consumers who load money into so-called closed-loop wallets. According to sources familiar with the situation, the central bank has initiated informal consultations with EV charging-point operators and other app-based EV platforms to evaluate potential consumer risks. This scrutiny follows allegations of fraud against BluSmart, which highlighted vulnerabilities in India’s fast-growing digital services ecosystem. Closed-loop wallets, widely used within the EV sector for services such as ride booking and charging, function solely within a single platform. Unlike open-system wallets regulated by the RBI, these digital wallets lack direct central bank oversight, making them particularly susceptible if the platform fails. Following the BluSmart shutdown, thousands of users who had preloaded cash into the wallet for airport and intra-city rides found themselves unable to obtain refunds or transfer their funds. The company informed customers that it could take up to 90 days to process refunds. The RBI is now considering proposing escrow arrangements for consumer balances in app-specific wallets, similar to those required of payment aggregators, to safeguard funds if a company ceases operations. Another option on the table is extending elements of the Prepaid Payment Instruments (PPI) guidelines to large-scale closed wallets. While the RBI has not yet taken a formal stance, any move to increase oversight could significantly impact India’s digital economy. Many platforms rely heavily on prepaid balances to build consumer loyalty and encourage repeat transactions. Sources indicated that the central bank may also hold a meeting with stakeholders in the coming weeks to discuss potential measures. An official response from the RBI is still pending. -Bloomberg

Honda Motor Co. has forecast a significant 70% decline in net profit for the financial year 2025–26, citing the adverse effects of U.S. trade tariffs on the global automotive industry. The Japanese automaker expects net profit to fall to 250 billion yen by March 2026, attributing the drop primarily to the economic impact of tariff policies and recovery efforts. This projection follows Toyota’s recent announcement forecasting a 35% year-on-year decrease in annual net profit due to similar pressures. Honda estimates that the tariffs and related recovery measures will cut around 450 billion yen from its operating profit over the year. The negative outlook arises after U.S. President Donald Trump imposed a 25% tariff on imported vehicles last month, a move aimed at revitalising the U.S. automotive sector but posing significant challenges to Japanese manufacturers. Speaking to reporters, Honda CEO Toshihiro Mibe acknowledged the difficulty of making long-term forecasts amid fluctuating trade policies, stating, “The impact of tariff policies in various countries on our business has been very significant.” Honda reported a net profit of 835 billion yen for the previous financial year, marking a nearly 25% drop from the previous period and falling short of its February forecast of 950 billion yen. The decline was attributed to lower sales volumes, especially in China and the ASEAN region, as well as increased incentives for electric vehicle (EV) sales in North America. Despite these challenges, hybrid vehicle sales showed growth. There is a potential silver lining for Honda as recent developments may lessen the financial strain from tariffs. Last month, President Trump issued an executive order to mitigate the cumulative effects of overlapping tariffs, offering a two-year grace period for automakers to restructure their supply chains within the United States. This decision is expected to benefit Honda, which currently manufactures over 60% of its U.S. vehicle sales domestically, the highest proportion among major Japanese automakers. Tatsuo Yoshida, an auto analyst at Bloomberg Intelligence, noted that Honda’s extensive U.S.-based production may cushion the blow compared to its peers, making the impact of tariffs “comparatively smaller” for the company. -Japan Today