Burberry set to beat sales targets as well-off shoppers spend more
LUXURY FASHION brand Burberry said sales are set to be higher than first thought as rich shoppers in Asia and the US increased spending on its products.
The company said sales in the three months to March 27 are now expected to jump between 28 per cent and 32 per cent compared with a year earlier.
Bosses have benefitted from stores being open again in China, South Korea and the US, even though sites across Europe remain shut due to Covid-19 restrictions.
Burberry has also been focusing on selling more products at full price, rather than with discounts, and more sales are now seeing customers spend the ticket price.
Russ Mould, investment director at AJ Bell, suggested wealthy customers who would typically travel to Europe to spend a lot of money on Burberry appear to be shopping in local Burberry stores instead.
He said: “A lot of its business has historically come from Asian tourists taking trips across Europe. They like to spend big and its products are highly desirable.
“The restrictions on international travel are only in the nascent stages of being lifted and the return of tourist-related sales may not pick up in earnest until 2022.
“Therefore, current sales are likely to be driven by domestic customers. In January it flagged good full-price sales in places like the Americas, mainland China and Korea.
“As more regions start to come out of lockdown restrictions, there is a sense that we could see a huge spending spree as a lot of people fortunate to have been working throughout the pandemic may have amassed considerable spare cash.”
The firm has made its famous products in Castleford and Keighley in West Yorkshire for more than 100 years.