Burberry grows sales despite knock to UK tourist demand
The fashion house has welcomed a new creative chief this year.
Burberry bumped up its sales in the first quarter but has warned that tourist numbers are falling in the UK.
Burberry said its sales grew by 3% in the 13 weeks to June 30, up from £478 million to £479 million.
The fashion house warned that sales in the UK and Europe had been knocked due to weaker tourist demand but that Chinese tourists had lifted sales in Hong Kong, Korea and Japan.
The Asia Pacific region drove growth in Burberry’s digital sales, with mobile sales now making up the largest proportion of purchases made online.
Marco Gobbetti, Burberry’s chief executive, said: “While we know it will take time to achieve our ambitions, our progress to date and the energy in and around the company give me confidence for the future.”
Burberry’s shares were down 3.47% or 73p to 2,028p following the news.
“Burberry has a new creative impetus, a commitment to pushing the exclusivity of the brand ever higher and a focus on driving down costs whilst pushing sales effectiveness higher,” said Steve Clayton of Hargreaves Lansdown.
“The success of these will determine the stock’s potential, but it will be years, not hours or days, before the final whistle blows.”
Burberry is gearing up for the first collection from its new chief creative officer, former Givenchy designer Riccardo Tisci.
Pieces from the collection will be launched through “instant drops” from September.
Burberry is also collaborating with veteran British designer Vivienne Westwood, who is creating pieces for the brand that will be sold from December.
The fashion business is also working with Farfetch to aid the distribution of products sold online and said on Wednesday that the partnership was “performing ahead of our expectations”.
It emerged last month that Burberry’s former chief creative officer, Christopher Bailey, is to walk away from the fashion chain with a bumper pay-off of around £13 million.
Mr Bailey was Burberry’s chief executive from 2014 until July last year, and in October announced that he was leaving his role as creative director.
According to the retailer’s annual report, the 47-year-old last year received a total of £4.2 million from his salary and benefits.
This included £1.1 million in basic salary, alongside £469,000 in benefits, £330,000 in pension payments and a £1.22 million bonus.