Burberry lifted by Chinese demand
Burberry’s departing chief executive Angela Ahrendts is set to leave the group on a high after seeing no let-up in demand from Chinese consumers.
Ms Ahrendts, who is due to step down in the summer for a job at Apple, posted a 13% rise in retail revenues to £928m (€1.13bn) in the six months to March 31, with demand for its handbags and scarves in China and Korea particularly strong.
The update ahead of full-year results on May 21 was partially overshadowed by the company’s warning on the strength of the pound, which is likely to have a “material” impact on profits in the current financial year.
Based on trading in 2014, Burberry said currency exchange rate movements would reduce profits in retail and wholesale trading by about £30m (€36.4m).
Despite the warning, Burberry shares were on the front foot today as Ms Ahrendts said the brand had an “excellent foundation” for the future.
Outerwear and large leather goods accounted for nearly half the growth in the latest half-year, with men’s accessories and tailoring also performing well.
Asia Pacific saw double-digit percentage comparable sales growth, led by China and Korea, while its other regions posted mid-to-high single digits.
Ms Ahrendts, who has been with Burberry for seven years, will be succeeded by Yorkshire-born chief creative officer Christopher Bailey.
The 158-year-old business, which is based in London, has 215 retail stores, 227 concessions, 55 outlets and 70 franchise stores.
Burberry plans to open between 20 and 25 mainline store in the current financial year and close between 15 and 20, with openings biased to flagship markets and travel retail. It opened 11 stores in the last half year, including a flagship store in Shanghai.
