Burberry’s sales edge up as group awaits new chief

Financial Times USA - - COMPANIES - MARK VANDEVELDE — LONDON

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

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