Burberry warns City it will have to wait for fruits of Tisci’s labours

The Daily Telegraph - Business - - Business - By Ash­ley Arm­strong

BURBERRY has toasted the “ex­cep­tional” re­sponse to its new de­signer Ric­cardo Tisci’s run­way col­lec­tion but warned the City will have to wait to see the re­sults in its num­bers.

Julie Brown, the fi­nance chief, said that fol­low­ing the ex-Givenchy de­signer’s “King­dom” fash­ion show in Septem­ber, whole­sale clients across Europe had dou­bled their or­ders, while it had en­joyed a “sig­nif­i­cant in­crease” in or­ders from US clients.

Mr Tisci’s run­way col­lec­tion is not avail­able to buy un­til Fe­bru­ary. How­ever, Burberry said it had been cre­at­ing “brand heat” by sup­ply­ing lim­ited-edi­tion “cap­sule” col­lec­tions to se­lected stores. It has also launched a small “B Series” col­lec­tion with its new TB mono­gram.

The lux­ury brand said it would meet profit fore­casts as its £173m half-year ad­justed op­er­at­ing prof­its slightly beat an­a­lyst con­sen­sus of £169m, and a 3pc drop in sales to £1.2bn was in line with ex­pec­ta­tions. Its shares rose 2.7pc to end at £18.64.

The busi­ness was boosted in its whole­sale busi­ness by Chi­nese lux­ury shop­pers in duty-free out­lets. This helped off­set a slip in sales as it re­moved its prod­ucts from whole­sale stores, which it be­lieves do not meet its new high lux­ury stan­dards.

Marco Gob­betti, the chief ex­ec­u­tive, has been at­tempt­ing to el­e­vate Burberry’s brand by in­clud­ing hand­bags cost­ing up to £2,000. He warned the turnaround would take time and the re­sults would lag be­hind changes be­ing made to the busi­ness. New items in­clude a £295 T-shirt fea­tur­ing the new “TB” logo de­signed by Mr Tisci, which sold out within four hours of launch­ing in China.

Burberry said its B Series col­lec­tion – which will be launched on the 17th of ev­ery month be­cause it is Mr Tisci’s “lucky num­ber” – was de­signed not to drive vol­ume but cre­ate a buzz as it was pop­u­lar with so­cial-me­dia in­flu­encers. Mr Tisci is also pro­lific on In­sta­gram, re­cently teas­ing shots of a forth­com­ing col­lab­o­ra­tion with Vivi­enne West­wood to his 2.3m fol­low­ers.

Mr Gob­betti said that the mix of B Series, cap­sule col­lec­tions and col­lab­o­ra­tions was a de­lib­er­ate ef­fort to shrug off the rigid­ity of the tra­di­tional fash­ion buy­ing cal­en­dar and em­brace the “next fron­tier of see now, buy now”.

Burberry, un­der Christo­pher Bai­ley, had at­tempted to rev­o­lu­tionise the in­dus­try by al­low­ing cus­tomers to im­me­di­ately pur­chase “sea­son­less” items as they were shown on the cat­walk. How­ever, Mr Gob­betti said the tac­tic had be­come “static, be­cause once they had been shown they stayed in the shops for months. We want to keep on with the nov­elty of new items with new prod­ucts be­ing launched of­ten”.

The for­mer Cé­line boss said he was not con­cerned that sell­ing T-shirts and hood­ies would de­tract from his lux­ury mis­sion. “This is how peo­ple dress now, and we are not sell­ing it for £39.99,” he said.

Mr Tisci was named in March as the man to re­place long-serv­ing Mr Bai­ley as cre­ative direc­tor. Mr Bai­ley’s rein at Burberry was over­shad­owed by the flout­ing of cor­po­rate gov­er­nance rules at a time when the brand was suf­fer­ing from a dra­matic spend­ing slow­down in China.

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