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Burberry profits down in year of transition

Luxury fashion brand Burberry has seen its pre-tax profit decline by 5% to £394.8 million in what the company described as a year of transition.

FASHION

Burberry profits down in year of transition

Luxury fashion brand Burberry has seen its pre-tax profit decline by 5% to £394.8 million in what the company described as a year of transition.

In the year to 31 March, total revenue fell by 2% to £2.8 billion.

Adjusted pre-tax profit rose by 10% to £462.4 million at reported exchange rates but fell by 21% on an underlying basis, which was partly due to strategic actions taken to elevate the brand.

Retail revenue rose by 3% and accounted for 77% of revenue. Comparable sales edged up 1%.

Lower wholesale income, particularly in the US and in the beauty category, and reduced licensing income, principally due to planned expiry of Japanese licence, was partially offset by cost savings.

During the period, Burberry continued to work to strengthen and reposition its brand for growth.

Christopher Bailey, Burberry chief creative and chief executive officer, said: "2017 was a year of transition for Burberry in a fast changing luxury market. The actions we have taken to lay the foundations for future growth are yielding early benefits and I remain confident that these will build over time.”

Burberry’s new chief executive, Marco Gobbetti, will take up his role in July while Bailey will continue as chief creative officer.

Commenting on Gobbetti’s impending arrival, Bailey said: “With his extensive experience in the sector, we will build on these foundations to elevate and strengthen the brand further and take Burberry to the next level as a global luxury retail and digital business. I am excited to work closely with him in this next chapter."

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