Brexit sees a boost for Burberry
BURBERRY is expected to report a lift in fourth-quarter sales this week as the Brexit-hit pound continues to boost the fashion house despite a slowdown in UK consumer spending.
The group is forecast to notch up comparable sales growth of between 3 per cent and 4 per cent, driven by robust demand for luxury products in the UK and China.
Shoppers from the US and Asia have been flocking to Britain to take advantage of the plunging pound by snapping up luxury goods at a knock-down price. The pound’s near 20 per cent fall versus the dollar since the Brexit vote has made British products cheaper for foreign buyers.
The three-month update on Wednesday comes alongside half-year results, forecast to show a total revenue rise of 14 per cent to £1.6billion, according to analysts at Bernstein. It said total retail revenues looked set to jump by 19 per cent to £1.3billion over the period.
Bernstein’s Mario Ortelli said: “In the second half of 2017, we expect the continuing trends from the last period with good sales in mainland China and UK in part offset by a still-weak Hong Kong.”
The firm said in January that its UK performance had contributed to a 3 per cent rise in overall comparable sales across the group in the three months to December 31, with an improvement in some under-pressure markets, including Hong Kong and France. The third-quarter sales rise marked a welcome recovery under a turnaround plan that has included simplifying the product line, revamping its digital store and cutting costs.
Christopher Bailey is stepping down from the role of chief executive to become president and chief creative officer as part of the overhaul.
Marco Gobbetti has initially joined as an executive and will become chief executive in July.
The firm – famous for its trench coats and check scarves – has set its sights on improving beauty sales after inking a deal with make-up and fragrance giant Coty at the beginning of the month.
The licensing agreement will start in October and will see Burberry taking the creative lead and the US beauty giant using its global distribution network.
Burberry has already launched luxury fragrances Mr Burberry and My Burberry and revamped its make-up range over the past four years.