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Burberry boosted by strong retail sales

Burberry’s revenue rose 6% year-on-year for the six months to September 30 to £572m, boosted by solid retail sales and a particularly strong performance from the UK and Korea.

Wholesale sales remained weak, down 23% on an underlying basis as forecasted.  However, the luxury label predicted that wholesale sales will be down 15% at constant currency over the next six months as stockists order cautiously and Burberry continues to feel the effects of last year’s closure of its younger positioned Thomas Burberry label and underperforming accounts. However Burberry said that the drop with be offset by rising US wholesale sales.

Burberry’s retail sales rose 14% on an underlying basis to £311m during the six month period. Like-for-like sales grew by 2% and were strongest in the second quarter, rising 5% between July and September as the autumn 09 collections were particularly well received.

Revenue for Europe (excluding Spain) was up 2% on an underlying basis to £195m, with the UK the strongest performer. Burberry’s chief financial officer Stacey Cartwright said this was driven in part by a growth in tourism due to the weak pound and also by store refurbishments and new store openings.

Burberry said its outlook for the full year remained positive, with wholesale’s rate of decline slowing and average retail selling space set to grow by a net 8-10%.

Chief executive Angela Ahrendts said: “Having completed a strong second quarter, Burberry delivered a solid first half revenue performance. During the period, we achieved further strategic progress, highlighted by good non-apparel growth, the strengthening of our position in Japan and continued brand investment, as demonstrated by Burberry’s return to London Fashion Week. In this uncertain environment, the team at Burberry remains focused on executing to capitalise on all available opportunities.”

Globally, Burberry has 122 retail stores, 255 concessions, 47 outlet stores and 90 franchise stores

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