Luxury fashion label Burberry today announced that it expects profits for its full year “to be around the lower end of market expectations” following disappointing sales over its second quarter.
Despite bucking the economic trend in recent years and reporting a strong retail sales performance over Q1, the British fashion house has seen total sales including new space rise six per cent in the 10 weeks to September 8th 2012.
Reporting that like-for-like sales remained unchanged year-on-year, the group noted that there had been “a deceleration in recent weeks”, blaming economic uncertainty.
Burberry CEO Angela Ahrendts said of the figures:”As we stated in July, the external environment is becoming more challenging.
“In this context, second quarter retail sales growth has slowed against historically high comparatives.
“Given this background, we are tightly managing discretionary costs and taking appropriate actions to protect short term profitability, while continuing to execute on our proven five key strategies.”
Store expansion has long been part of the brand’s strategy and by year’s end the group is expected to have opened stores in Shanghai, Milan, Hong Kong, Miami and London, although these latest results emphasise the fact that even the luxury market is not immune to the current climate, warns Trendstop.com’s CEO Jaana Jatyri.
“Burberry’s latest results show that even the top-end of the market isn’t functioning at full capacity in the current economic climate,” she said.
“The global economic crisis is dragging on and the longer it drags on the less confident even wealthier individuals become. Unfortunately, people lacking confidence do not shop at Burberry.
“A percentage of the aspirational buyers that have driven Burberry upwards are starting to run out of steam.
“In recent years, Burberry has thrived in the emerging markets, where people crave democratic luxury, but even the emerging markets are slowing.”
“This is not the beginning of the end for Burberry, just a shot across the bows.”