Burberry revenues break £1 billion barrier in first half
Luxury fashion brand Burberry saw its revenues exceed £1 billion for the first time in the first half of its financial year as profits were delivered in line with forecasts.
In the six months to the end of September, total revenues increased by 17% to £1.03 billion while adjusted profit before tax was £173.9 million compared to £173.4 million in the same period last year.
Retail sales climbed 20% to £694.5 million as comparable store sales increased by 13%. The group said growth was largely driven by strong sales of outerwear and large leather goods.
While global footfall in Burberry’s stores remained soft in the period, visits to its website grew significantly with online sales outperforming in all regions. Offline, Burberry’s flagship markets performed well driven by the travelling luxury customer.
As planned, Burberry opened 14 mainline stores and closed eight during the first half, while opening seven concessions and closing six. Store openings were biased towards high potential markets including China, the Middle East, India, Brazil and Mexico.
In addition, the group continued to invest in its digital capabilities both on and offline as orders via iPads in-store and "order online, collect in store" helped drive increased conversion and average transaction values.
For the full year 2013-2014, Burberry expects net new store openings to contribute low to mid single-digit percentage growth in retail revenue. The group plans to open around 25 mainline stores and close about 15, while opening around 15 concessions and closing about the same number.
Angela Ahrendts, Burberry chief executive, said: "We are proud to announce a first half performance that saw Burberry's revenue exceed £1bn for the first time, reflecting the continuing strength of our global brand momentum.
“We remain focused on executing our retail, digital and marketing strategies in the all-important third quarter and in what remains an uncertain macro environment. The senior team continues to balance brand appropriate revenue growth, selective investment and infrastructure efficiencies to drive sustainable profit growth across the portfolio, especially with the significant long-term potential of our fifth product division, Beauty."
The results are the first from the group since it announced that Ahrendts will be stepping down by mid-2014 to join Apple. She will be succeeded by Christopher Bailey who will also continue in his role of chief creative officer.
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