Burberry sales fall over Christmas as UK labelled 'under-performer' in update
Burberry sales fall over Christmas as UK labelled 'under-performer' in update
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Burberry, the luxury fashion brand, has reported a decrease in sales over the festive period. The company stated it was acting with "urgency" to turn the business around and return to profit. The global fashion house, established in England in 1856, identified the UK as the "under-performer" among its markets worldwide. Burberry initiated a £40m cost-cutting programme in November after falling into a loss.
In an update to shareholders on Friday, it indicated early signs that the turnaround plan was beginning to yield results. However, it still reported revenues of £659m for the 13 weeks to December 28, down 7% from the £706m generated over the same period a year prior.
This was better than some analysts had anticipated, causing Burberry’s share price to surge by up to 15% on Friday morning. Store sales increased in America, boosted by locals and its refurbished New York shop, while sales decreased in Europe, the Middle East and Africa driven by both locals and tourists.
Kate Ferry, Burberry’s finance chief, said the UK market is "reasonably small" in terms of its global sales, but that the region was an "under-performer" with some pressure on spending among shoppers living in the country. However, the US was strengthening and Asia – a major market for the brand – was "certainly showing signs of recovery", Ms Ferry said.
Sales nevertheless dropped by nearly a 10th in Asia, with the key Chinese market seeing a 7% decline over the latest quarter. The luxury sector has been facing a more stagnant market in recent years, particularly affecting the region. Burberry's signature scarves, which start from around 420 euros (£355), have been a topic of discussion by chief executive Joshua Schulman regarding the company's pricing strategy.
