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Burberry profits plunge 12.5%

Burberry saw profit before tax dip 12.5% to £175 million for the year to March 31 because of the economic slowdown, but sales passed the £1 billion barrier for the first time.

Burberry saw revenues rise of 21% to £1.2bn over the year. It made an attributable loss of £6 million for the year, compared to a profit of £135.2 million in 2008, as a result of restucturing costs in Spain alongside non-cash impairment and other charges.

Retail revenue rose 14%, making up half of total sales, and wholesale revenue increased 2% for the year. Burberry said all product categories delivered underlying revenue growth; with womenswear up 6%, menswear up 5%, kidswear up over 50% and non-apparel up 12%.

Burberry said it had taken rapid actions to mitigate the impact of the economic slowdown during the year and that profits had come in in line with company expectations.

Burberry said it had executed a £50 million global cost efficiency programme, reduced inventory by £50 million at constant exchange rates, and reduced net cash by 87% to £8 million for the year.

Burberry chief executive Angela Ahrendts said: “2008/09 was one of the most challenging years the luxury sector has ever faced, especially in the second half. Against this background, Burberry grew revenue to £1.2 billion. We also took rapid action to mitigate the impact of the economic slowdown. Entering the new year, we believe Burberry is best positioned to capitalise on opportunities which will deliver sustainable long-term growth.”

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