Burberry's sales climb 30% amid plunging pound
Fashion firm Burberry has seen UK sales rocket as tourists flocking to London to take advantage of the Brexit-hit pound sparked a luxury shopping spree.
The group announced that UK like-for-like sales climbed by more than 30% in the three months to September 30 after the plunging pound saw overseas shoppers rush to London to snap up luxury goods at a better price.
Consumers from China and the US in particular have been travelling to the UK to hit the shops, according to the group.
It came as a welcome boost to Burberry and helped the group return to overall sales growth in its second quarter, up 2% against a 3% fall in the previous three months.
The company said that recent further falls in the pound were also now expected to add around an extra £125m to full-year profits, up from July's estimate of £90m.
Carol Fairweather, chief financial officer of Burberry, added that the group was "delighted" with its sales performance in the UK, which accounts for around 15% of group-wide revenues and some 40% of the European region.
She said sales to Chinese shoppers in UK stores were up more than 20%, and added that the group also saw a recovery in demand from British shoppers over the summer.
Sales of designer bags were strong in particular, she explained, especially Burberry's new equestrian-inspired satchel, the Bridle Bag.
Its second-quarter sales hike marks the group's first like-for-like growth for a year.
But it was not enough to prevent a drop in revenues over the first six months as a whole, which were down 4% to £1.16 billion with currency effects stripped out.
Burberry continued to see an impact from falling tourism in continental Europe after recent terrorist attacks, while the strong dollar has left sales in the United States lower as shoppers look elsewhere for luxury bargains.
Meanwhile, Online fashion firm ASOS has also reported a healthy rise in full-year profits, driven by growth across all of its key markets.
The retailer said that pre-tax profits came in at £63.7m, up 37% compared to last year. Sales grew 26% to £1.4bn, helped by a 50% rise in US revenue. In the UK and Europe, meanwhile, sales rose by 27% and 28% respectively.
Chief executive Nick Beighton said: "I'm pleased with progress in the business. The strength of these results reflects our unwavering focus on delivering great customer experience, supported by rigorous execution of our investments.
"We continue to target our growth opportunities, so we're accelerating investment in both logistics and technology. The pace at ASOS is continuing in the new financial year, which we are looking forward to with confidence."
The success of ASOS flies in the face of recent data showing a faltering fashion market, with figures from Kantar Worldpanel showing on Monday that the British fashion market has witnessed its steepest decline in sales since 2009.
Tom Gadsby, analyst at Liberum, said: "ASOS has shrugged off the fears dogging the high street with an excellent set of full year results.
"We believe the company will reach its medium term target of £2.5bn of sales by 2019. Investment ahead of growth in infrastructure has been a key driver."
ASOS also used its results to refute claims surrounding working conditions at its warehouse in Barnsley, South Yorkshire.