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Burberry ramps up cost savings as luxury downturn bites

Burberry is accelerating its plans to increase productivity and efficiency as the luxury downturn in Asian markets continues.

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Burberry autumn 16

Retail revenues rose 1% to £603m on an underlying basis for the three months ended December, while comparable sales were unchanged year-on-year, compared with a fall of 4% in the second quarter.

Sales in the Asia Pacific region posted a fall in the mid- single digits, with Hong Kong and Macau weighing down performance. The Europe, Middle East, India and Africa region posted a mid- single digit increase, with particular strengths from Italy, Germany and Spain, while the Americas region improved from the second quarter and recorded marginally positive growth.

“In a tougher environment than expected, our sustained focus on growth and cost control drove a number of positive results over the quarter, including the outperformance of digital and a return to growth in mainland China,” said chief creative and chief executive officer Christopher Bailey. “While Burberry was impacted by the ongoing challenges facing the luxury sector, headwinds in Hong Kong and Macau masked an otherwise stronger performance in many markets.

“The outlook for our sector remains uncertain as the consumer and environment evolve. However, we are anticipating and responding to these changes through an intense focus on new growth opportunities and the acceleration of our productivity and efficiency agenda.”

Click here to see our report from this week’s autumn 16 Burberry menswear show at London Collections Men.

 

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