WEALTHY CHINESE SPLASH OUT AT BURBERRY
LUXURY fashion firm Burberry cheered booming sales of raincoats and bags as demand has rebounded in China.
Annual profits rose by a quarter to £634m, driven by enthusiasm from Chinese shoppers after Covid restrictions were scrapped.
Sales surged in the last three months of its financial year to April 1, after growth recovered in China, where sales rose 13pc.
Annual sales hit £3.1bn, a 10pc rise on the previous year.
Burberry boss Jonathan Akeroyd said: ‘We have delivered a strong financial performance, supported by good progress in our core leather goods and outerwear categories.’
But shares dived 5.2pc, or 131p, to 2389p after it pointed to sales lagging in the US, and did not boost its full-year profit guidance as investors had hoped.
Burberry warned it was ‘mindful of the macroeconomic and geopolitical environment’, quashing investor optimism. Last month the retailer’s shares hit record highs.
European rivals Hermes, LVMH and Richemont have all posted bumper sales in recent weeks.
But Akeroyd said sales to tourists were doing better in European countries versus the UK and pointed the finger at the absence of VAT-free shopping for visitors to the UK.
Although sales to tourists rose 19pc in the UK for the fourth quarter, they more than doubled in Paris.
Russ Mould, investment director at AJ Bell, said: ‘Akeroyd and designer Daniel Lee are trying to refocus on Britishness to help keep the brand distinctive. Having a wealthy clientele is an advantage in the current economic climate as Burberry’s typical customer is going to be less affected by the rising cost of living.’