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Burberry knocked by weak wholesale market

Burberry’s revenue fell 4% year-on-year for the three months to June 30, largely due to a dip in wholesale sales.

Wholesale revenue fell 28% over the quarter but Burberry’s own-store retail revenue was up 12% with strong sales in kidswear, accessories and men’s tailoring. Like-for-like store sales were flat.

Total licensing revenue dropped 3% year-on-year.

The UK was one of Burberry’s strongest performing countries, helping Burberry to a 10% sales growth in Europe, excluding Spain, which was down 6%. Korea also performed well but the US was down.

The company is predicting wholesale sales will by down 25% for the first six months of the fiscal year to September 30. The luxury brand said this was due in part to stockists buying less and partly due to the conversion of the Burberry Middle East operation from wholesale to retail and the closure of its Thomas Burberry brand.

Burberry’s predictions for the full year’s results remain unchanged.

Burberry chief executive officer Angela Ahrendts said: “Burberry has made a solid start to the year in what remains a challenging environment. We continue to execute on our strategies by product, region and channel, while driving operational and cost efficiencies. Our brand momentum, strong product designs and continuing back-of-house improvements mean that we are well-placed to deliver sustainable long-term growth.”

Burberry will show at London Fashion Week this September.

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