Burberry like-for-likes increase 7% in second half to March 31 as sales in China surge

Total sales increased 9% to £1.1bn in the second half while underlying revenue in its retail arm, which now represents 75% of group sales, jumped 13% to £840m.

Growth at the luxury fashion brand was driven by the Asia Pacific region, particularly China and Hong Kong. The Americas saw low single-digit growth and Europe was broadly flat.  “Korea and Italy remained weak,” Burberry said.

Burberry plans to open about 10 net mainline stores, predominantly in China and Latin America, in 2013/2014. The retailer said it expects those stores to contribute a “low to mid single-digit” increase in retail revenue for the year.

Burberry opened eight net stores in the six-month period including its Chicago flagship and Knightsbridge men’s store. Average retail selling space in the second half increased by 14% and Burberry now trades from 206 stores.

Burberry chief executive Angela Ahrendts said: “With three quarters of our revenue now generated in retail, we are pleased with the 13% growth in this channel in the second half, driven by continued innovation in product, marketing and customer service, especially over Christmas and Chinese New Year. 

“Looking forward, while we expect the external global environment to remain challenging, the team is intensely focused on optimising the significant opportunities that exist for the brand across geographies and product divisions, with particular emphasis on unlocking the potential of our digital platform and our newly integrated fragrance and beauty business.”

The retailer said product, marketing and customer service initiatives “drove strong performance in the festive periods” in both the third and fourth quarters. 

However, Burberry said footfall “remained soft and was mitigated by improved conversion rates and higher average transaction values”. 

Burberry added: “Consumer preference was again weighted towards fashion and outerwear in Prorsum and London, where the penetration increased by four percentage points. 

“Within the handbag category, leather and key shapes outperformed. Men’s accessories and tailoring continued to perform strongly and the spring/summer women’s Brit collection was well-received.  Digital outperformed, enabled by investment in infrastructure, content and marketing.”