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Burberry ramps up store closures

Burberry has stepped up the number of store closures for the year to 31 March, with 34, including seven outlet stores, shuttering globally. 

The business also opened 14 shops during the year, bring the net closures to 20. 

Chief operating and financial officer Julie Brown said the closures were “all in line with our strategy, the focus is on getting the right brand positioning for Burberry.”

The news comes as the brand house reported a 5% increase in full-year adjusted operating profit year on year to £467m. Revenue for the year dropped 1% to £2.7bn, while revenue excluding beauty wholesale improved by 2% year on year to £2.6bn. 

Brown said part of Burberry’s turnaround strategy has been to introduce higher price models, such as the recently launched belt bag priced at £1,590 retail, which is “proving to be really successful”.

She said: “Burberry’s leather goods pricing architecture used to be £800-£1,200, the belt bag is a higher price point for us but it is higher quality. It’s not about price increases, it’s about aligning the brand product and positioning.” Leather goods pricing now ranges between £1,500 to £2,000.

Earlier this week Burberry announced it is to acquire Italian luxury leather goods business CF&P, for an undisclosed sum. Burberry said the deal would give them greater control over quality, cost, delivery and sustainability of its leather goods.

Part of this brand realignment has also been to “consolidate” its brand positioning in the US, which Brown said has been a “very challenging” market: “We are making the most significant changes to wholesale in the US. Consolidating this and our positioning in department stores to be at a more elevated level.”

Brown said Burberry anticipates the US wholesale business to show double-digit decline next year. However, retail sales have remained buoyant with a “very strong fourth quarter in the US.” Asia Pacific was Burberry’s strongest region overall.

Brown said the UK wholesale business is “broadly stable,” despite a tough fourth quarter.

Brown revealed that in overall performance, the strongest category was men’s apparel, growing 4% through both retail and wholesale, compared to a 2% retail and wholesale growth in women’s apparel.

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