British luxury brand Burberry reported an 8% rise in revenue for first half despite UK sales slowing.
Retail revenue rose 10% to £577m in the six months to September 30 as like-for-like sales grew 3%. However growth slowed in the second quarter with like-for-like sales up just 1% compared to a 6% rise in the first quarter, which Burberry attributed to a lowering in footfall.
Sales in the UK and China slowed during the second quarter, while sales in Hong Kong, France and Germany were robust. Men’s tailoring and men’s accessories performed strongly as the penetration of sales of Burberry’s higher end lines, Prorsum and London, increased.
Last month Burberry opened its new Regent Street store in London. Chief financial officer Stacey Cartwright said the company has been “delighted” with trade there so far. “We are meeting and exceeding expectations,” she added.
During the first half wholesale revenue rose 5% to £253m. Europe was broadly unchanged year-on-year, while the US saw double digit growth.
Chief executive Angela Ahrendts said: “Against record prior year comparatives, Burberry delivered 8% total revenue growth and 10% retail growth in the first half, albeit slowing in the second quarter. In a more challenging external environment, footfall declined but brand momentum remained strong, particularly with our higher spending luxury consumer.”
She added: “Our highly experienced team remains very focused on the consistent execution of our key strategies, engaging consumers through innovative retail and digital marketing initiatives as we enter the most important quarter of the year. We continue to invest for long term growth in flagship and emerging markets, while tightly controlling discretionary spend.”
The luxury brand also announced today that it is to directly operate fragrance and beauty in order to capitalise on “significant opportunities”.
Fragrance and beauty will be run as Burberry’s fifth product division alongside accessories and women’s, men’s and children’s apparel. To facilitate the transition, the licence relationship with Interparfums has been extended until March 31 next year after which Burberry will take over the running of the categories.