Burberry’s sales edge up as group awaits new chief
Burberry, the UK luxury fashion group, managed to scrape an increase in reported profit last year thanks to a sharp fall in the pound. Sales from Burberry’s own stores, which make up 77 per cent of the total, increased 3 per cent. That was mainly due to the opening of outlets in Asia, although same-store sales also crept up 1 per cent.
However, after stripping out the benefit of currency movements, adjusted profit before tax fell 21 per cent, in line with analysts’ forecasts. Burberry said the figures were pulled down by lower wholesale revenues and the expiry of a brand licensing agreement in Japan. Shares climbed 5.2 per cent to £17.26 after the news yesterday.
Cost-cutting plans were on track, the company said, with £20m of annualised savings achieved in the past year.
Earlier t his month Burberry announced it was relocating 300 roles from London to a back-office operation in Leeds. The move will free up several floors of offices in London’s expensive Westminster district. The campus opened in 2009 to a design by chief executive Christopher Bailey as part of a £100m efficiency plan aimed at bringing together executives who had previously been scattered around London.
Unveiling the group’s financial results for the last time as chief executive, Mr Bailey said he was looking forward to the arrival of Marco Gobbetti in the top job in July, which would help “elevate and strengthen the brand further and take Burberry to the next level as a global luxury retail and digital business”.
Mr Gobbetti was hired from Céline last year to bring business heft to a company that had been criticised for appointing Mr Bailey to the dual role of chief creative officer and chief executive. The new recruit is spending his first six months working within the luxury brand’s Asia-Pacific business because of contractual commitments that bar him from an immediate start in a more senior job.
Burberry increased its full- year dividend 5 per cent, to 38.9p, and announced a £300m share buyback. The distribution will include cash from Coty’s £130m franchise deal to take over Burberry’s fragrance and beauty business, announced last month.
That ended an effort to develop the fragrance business in-house, which last year saw the label launch its “Mr Burberry” fragrance.
The opening of new outlets in Asia helped to boost Burberry’s sales