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Analyst reaction: Burberry's results

As sales at luxury British brand Burberry rose 8% in its first half despite profits dipping due to a one off charge Drapers takes a look at what retail analysts think about the latest set of results.

Gregor Jackson, partner at luxury brand consultancy gpstudio, said that today’s announcement would do much to “allay” fears of luxury retail investors.

He added: “The rise – of some 40% – in menswear accessories sales and the focus on the beauty ranges suggests management has found a sustainable way to bring in the ‘mass affluent’ customer, who may spend less per transaction but offer a lucrative high-volume sales base.

“Critically, while Burberry has found ways of reaching a far wider base - growing its global footprint in developing markets and attracting a broader audience in the Far East and Western territories - sales in its super-premium ranges remain strong.”

Investec analyst Bethany Hocking was slightly cautious about the results. She added: “We remain long-term fans but the backdrop is tough, Christmas is crucial, and we see few near-term catalysts.”

While Tarlok Teji, retail analyst at Manchester Business School, said: “Burberry is a quality brand with quality management and the market makers over-reacted to their trading statement last month. The results show that luxury, although not immune to these recessionary times, is more resilient than unclear mid-market offerings such as Marks and Spencer.”

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