Asian luxury sales soar as Burberry predicts 35% rise in profits

0

British luxury fashion house Burberry has recorded 22% growth in sales in Asia compared to pre-pandemic levels and forecasts a 35% increase in annual profits compared to last year, despite a down 4% in Europe.

Soaring sales of its luxury clothes and bags in Asia and the United States led to its business rebound from the pandemic. The British brand said in a trade update this morning that full-price sales were up 26% from pre-pandemic levels in the three months to December 25, and reported 10% growth over compared to the previous quarter.

Burberry posted third-quarter revenue of $986 million, up 5% from the same period last year, despite a 3% drop in in-store sales in the period. Burberry attributed much of this strong performance to the sale of full-priced outerwear and apparel, including Burberry sneakers, its branded raincoats and bags.

The company said it now expects to increase full-year earnings 35% year-on-year through April 3 to around $682 million, against City analysts’ previous expectations of an increase in earnings. sales up 19% to just over $644 million.

Full-price same-store sales were up 26% from the same period two years ago, Burberry said, while same-store sales on the same metric fell slightly 3% due, a said Burberry, of the expected reduction in markdowns.

Burberry also attributed the strong profit growth to designer Riccardo Tisci’s products appealing to younger consumers.

Increase in Burberry sales in Asia

Sales of Burberry apparel and accessories in Asia rose 22% from two years ago (pre-pandemic) in the quarter, rising 5% in the previous three months amid strong sales of coats, down jackets and various versions of Burberry’s Lola bag.

In contrast, in Europe, sales were down 4% from two years ago, with the drop in numbers mainly attributed to a sharp drop in the number of international tourists, who accounted for 40% of Burberry’s sales before the pandemic. .

In fact, given the reliance on buyers from China, Russia and the Middle East to support luxury goods sales in key European markets including Italy, France and the UK , these numbers seem remarkably robust.

Indeed, the small drop was a dramatic improvement from the previous quarter’s 27% crash, with COO Julie Brown noting that Burberry’s new image was proving increasingly attractive to more local shoppers. in Europe.

Burberry’s CEO changes ahead of time

Speaking during the business update, Burberry Chairman Gerry Murphy said full-price sales growth accelerated from the second quarter, reflecting higher quality business. He said: “Despite the ongoing challenges in the external environment, we are confident of ending the year strong and providing an excellent platform on which to build when our new Chief Executive Jonathan Akeroyd joins us in April.”

The next management change is expected after Burberry poached Akeyroyd from rival luxury brand Verscae to succeed Marco Gobbetti as chief executive. The latter was halfway through its turnaround plan, which aims to upscale Burberry even further, with prices set to rival its French and Italian contemporaries.

Gobbetti is due to step down at the end of this year after deciding he wants to return home to Italy. He is credited with luring designer Tisci to Burberry in 2018, having previously hired him to work at luxury brand Givenchy.

Share.

Comments are closed.