Hong Kong protests hit Burberry but new design chief performing well
The fashion house said it also benefited from the weak pound bringing in more tourists to UK stores.
Huge protests in Hong Kong have hit British fashion label Burberry due to the disruption in the area, although this was offset by a boost in sales on mainland China, the company said.
Bosses at the retailer also revealed that the weak pound has helped sales in the UK, with foreign tourists taking advantage of the lower prices and splashing out on the latest fashions.
The business also hailed Riccardo Tisci’s new collections as a huge success, as the designs from the new chief creative officer filter through to the shop floor.
The Italian designer joined Burberry a year ago but – with long lead times – his products are only now starting to fully hit stores.
We’re building out the architecture of bags Burberry chief financial officer Julie Brown
Chief financial officer Julie Brown said more than 50% of stock is now Mr Tisci’s designs, compared with March this year.
She also revealed that £170 black leather sleeves released as a limited edition B Series drop sold out in just 20 minutes.
On the demonstrations in Hong Kong, which have seen millions take to the streets in largely peaceful protests, she said: “We did see an impact from the protest. Our stores were impacted and this did contribute to a softer impact in the quarter. It’s not material at a group level but certainly at a local Hong Kong level.”
Further details were not revealed.
Ms Brown also reiterated that a no-deal Brexit would “materially impact” the business in the short term, particularly with shipments of products in and out of the UK, and is holding regular planning meetings to mitigate the impact.
But she was pleased with the overall performance of the retailer, revealing sales for the 13 weeks to June 29 rose to £498 million compared with £479 million during the same period a year ago.
The Asia Pacific market was the strongest, with “high single-digit” growth driven by mainland China, followed by “low single-digit” growth in Europe, the Middle East, India and Africa – driven by the UK and the weak pound.
Sales of accessories fell, but Ms Brown was particularly positive of the company’s dedication to handbags. She said: “We’re building out the architecture of bags.”
The finance chief added that 23 stores have been “aligned to the new vision” for Burberry, which includes plenty of the new products designed by Mr Tisci, and 80 stores will be “aligned” by the end of the year.
Nine stores were closed during the period – as part of plans to close 38 stores – but Ms Brown declined to reveal the locations, beyond saying they were mainly in the Asia Pacific region.