British luxury fashion house Burberry on Thursday announced sliding net profit during its first half as global demand for expensive clothing weakens, notably in China’s softening economy.

Profit after tax dropped 18 percent to £158 million ($196 million) in the six months to the end of September, the British group said in a statement.

“The slowdown in luxury demand globally is having an impact on current trading,” Burberry noted.

“If the weaker demand continues, we are unlikely to achieve our previously stated revenue guidance” for the group’s full year.

Reacting to the news, traders sent Burberry’s share price slumping 10.6 percent to £15.61 in early deals, making it by far the biggest faller on London’s top-tier FTSE 100 index, which was down 0.1 percent overall.

“Burberry’s sales growth slowed significantly in the second quarter, as trading conditions became much more challenging,” noted Charlie Huggins, a shares portfolio manager at investment firm Wealth Club.

“This is not a great surprise. Having splurged on luxury goods in the wake of the pandemic, wealthier consumers are now tightening their belts, meaning the whole sector is starting to feel the pinch.”

Huggins added that while “Chinese consumers are vital for the luxury sector… China’s economy is struggling”.

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© Agence France-Presse