China boost sees Burberry shake off slump in US sales
FASHION firm Burberry reported an 18 per cent rise in quarterly sales yesterday, boosted by a bounceback in China.
The company also flagged strong growth in Europe, helped by demand from big spending tourists.
But takings in the Americas, including the US, fell 8% with luxury brands being hit by reduced spending, especially among middle class shoppers.
Burberry’s takings overall surged to £589million in the
13 weeks to the start of July.
Mainland China enjoyed a “strong recovery”, the firm said, where revenues soared
46% on the previous year, when trade had been impacted by Covid lockdowns.
Burberry, which dates back to 1856 when Thomas Burberry started the business in Basingstoke aged just 21, highlighted a 36% jump in store sales of its outwear ranges, led by “heritage rainwear”.
The brand is famed for its checks, with its classic trench coat nearly £1,800.
Sales of leather goods in stores were up 13% – and the firm pointed to strong demand for its Frances bags, which have a price tag of more than £2,300 for some designs. During the quarter, Burberry opened or revamped 19 stores. They included the relaunch of its London’s New Bond Street last month, branded an “immersive shopping experience” including a new VIP area.
The firm is on track to refurbish more than 50% of its stores by the end of the 2024 financial year.
It stuck to its full-year outlook and also maintained its medium-term target for revenues of £4billion.
Chief executive Jonathan Akeroyd: “We have made good progress”, as the business looks ahead to new designer Daniel Lee’s products arriving in stores in September.
Yet Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown, said: “Underneath the hood, things aren’t quite as rosy as they might appear.
“A large reason for the uplift is a rebound in Asia and mainland China, following restrictions this time last year.”
She added: “The US is depleting its savings at a faster rate than other areas.
“This is reducing consumers’ sense of resilience and therefore willingness to spend on non-essentials.”