Burberry warns City it will have to wait for fruits of Tisci’s labours
BURBERRY has toasted the “exceptional” response to its new designer Riccardo Tisci’s runway collection but warned the City will have to wait to see the results in its numbers.
Julie Brown, the finance chief, said that following the ex-Givenchy designer’s “Kingdom” fashion show in September, wholesale clients across Europe had doubled their orders, while it had enjoyed a “significant increase” in orders from US clients.
Mr Tisci’s runway collection is not available to buy until February. However, Burberry said it had been creating “brand heat” by supplying limited-edition “capsule” collections to selected stores. It has also launched a small “B Series” collection with its new TB monogram.
The luxury brand said it would meet profit forecasts as its £173m half-year adjusted operating profits slightly beat analyst consensus of £169m, and a 3pc drop in sales to £1.2bn was in line with expectations. Its shares rose 2.7pc to end at £18.64.
The business was boosted in its wholesale business by Chinese luxury shoppers in duty-free outlets. This helped offset a slip in sales as it removed its products from wholesale stores, which it believes do not meet its new high luxury standards.
Marco Gobbetti, the chief executive, has been attempting to elevate Burberry’s brand by including handbags costing up to £2,000. He warned the turnaround would take time and the results would lag behind changes being made to the business. New items include a £295 T-shirt featuring the new “TB” logo designed by Mr Tisci, which sold out within four hours of launching in China.
Burberry said its B Series collection – which will be launched on the 17th of every month because it is Mr Tisci’s “lucky number” – was designed not to drive volume but create a buzz as it was popular with social-media influencers. Mr Tisci is also prolific on Instagram, recently teasing shots of a forthcoming collaboration with Vivienne Westwood to his 2.3m followers.
Mr Gobbetti said that the mix of B Series, capsule collections and collaborations was a deliberate effort to shrug off the rigidity of the traditional fashion buying calendar and embrace the “next frontier of see now, buy now”.
Burberry, under Christopher Bailey, had attempted to revolutionise the industry by allowing customers to immediately purchase “seasonless” items as they were shown on the catwalk. However, Mr Gobbetti said the tactic had become “static, because once they had been shown they stayed in the shops for months. We want to keep on with the novelty of new items with new products being launched often”.
The former Céline boss said he was not concerned that selling T-shirts and hoodies would detract from his luxury mission. “This is how people dress now, and we are not selling it for £39.99,” he said.
Mr Tisci was named in March as the man to replace long-serving Mr Bailey as creative director. Mr Bailey’s rein at Burberry was overshadowed by the flouting of corporate governance rules at a time when the brand was suffering from a dramatic spending slowdown in China.