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Burberry sees wholesale recovery

Burberry saw total sales rise 12% on an underlying basis to £380m for the three months to December 31, and wholesale sales began to recover.

Burberry’s wholesale revenue for the period was up 5% to £105m.

Burberry said the growth in wholesale sales, which had been down 23% in the first half of the 2009, was driven by strong product and higher reorders than expected plus a recovery of confidence among its stockists. More deliveries were shipped earlier which had a positive impact on the third quarter. Burberry said developments in its SAP IT systems had also boosted wholesale sales.

Burberry chief financial officer Stacey Cartwright said: ”We’ve also taken a few weeks out of the supply chain too so we can get product to market faster.”

However Burberry still expects its wholesale sales for the second half to be down by between 10% and 12%, although this is lower than the 15% originally forecasted.

Retail sales continued to be strong, growing 16% to £249m over the quarter, with like-for-likes up 10%. Licensing revenue fell by 3% to £26m.

Burberry said its continued strong retail performance was driven by sales of outerwear and accessories, boosted by digital media initiatives such as the company’s social media website

Geographically, the UK and Hong Kong were the standout performers for Burberry. European sales, excluding Spain, were up 18% to £112m for the period. Spain continues to be a poor performer for Burberry with sales down 3% for the period.

Burberry chief executive Angela Ahrendts said: “While continuing to plan cautiously for 2010/11, we are confident that our strategies by product, region and channel -underpinned by operational efficiencies - will drive profitable growth.”

Burberry expects full-year pre-tax profit to be at the top end of market expectations.

Burberry Prorsum showcased re-worked trenches, peacoats and flying jackets at Christopher Bailey’s catwalk show at Milan Fashion Week last weekend. For pictures and an online video of the catwalk show click here.


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