Growth strongest in Asia as British luxury group reports 18% first-quarter sales rise
Strong sales of men's clothing, large leather bags and coats during dismal spring weather in Europe helped British luxury brand Burberry to a better than expected performance in the first quarter of its financial year.
Angela Ahrendts, the chief executive, said: "Spring/summer 2013 was a standout season driven by innovative marketing, cohesive monthly fashion groups and exceptional execution."
The company, which recently signed actress Sienna Miller and her fiancé Tom Sturridge to front its advertising campaign, recorded an 18% rise in sales, at constant exchange rates, to £339m, well ahead of analysts' expectations.
When the impact of new store sales were stripped out, sales rose 13%, up from 8% growth in the previous three months.
The number of staff making Burberry's signature raincoat at its British factory in Castleford, West Yorkshire, has been doubled since 2011 amid high demand, with sales of outerwear and large leather goods such as its Blaze and Orchard bags accounting for half the brand's sales growth.
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| A Burberry store in Beijing – the brand saw double-digit underlying sales growth in ChinaMenswear sales rose 25% over the quarter as the label brought its men's catwalk show back to London this year. One customer was tennis ace Andy Murray who wore a Burberry suit for his visit to Downing Street after his Wimbledon triumph. |
Menswear now accounts for nearly a quarter of the company's sales and Carol Fairweather, chief financial officer, said it was a "significant growth opportunity" for the future.
Growth was strongest in Asia with Burberry outperforming rivals in the all-important Chinese market by harnessing the power of social media to raise the profile of the brand and by opening more large and glamorous stores. It saw double-digit underlying sales growth in the country over the quarter.
Fairweather said: "We've got a lot of self-help measures and quite a long way to go in China compared to some of our peers."
Two shops were opened in Shanghai during the quarter and another flagship store is planned to open in China later this year. The group has bounced back from a profit warning last September after sales in China had slowed.
The company said "soft" trading at its high street stores was offset by strong growth online, partly helped by the use of iPads by shopfloor staff to help customers order goods that were not immediately available.
Burberry is also experimenting with allowing shoppers to pick up goods ordered via the internet at flagship stores including outlets in London in Knightsbridge and Regent Street.
But Ahrendts, who topped the UK's pay league with a total package of £16.9m last year, almost £5m more than the next highest paid chief executive, warned that the macroeconomic outlook remained "uncertain" and that first half profits would fall below those of last year, partly because of the cost of bringing Burberry's fragrance and beauty business back in-house.
Article Source : http://www.guardian.co.uk
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