Luxury fashion label Burberry has today reported a seven per cent rise in like-for-like (LFL) sales over its second half thanks to double-digit store sales growth in China and Hong Kong.
In the six months ended March 31st 2013, total sales increased nine per cent to £1.1 billion, while its retail division saw a total sales boost of 13 per cent on the same period last year to £840 million.
Retail sales now account for 75 per cent of group sales and Burberry saw double-digit growth in all four product divisions with menswear, outerwear and digital all performing particularly strongly.
While online sales boosted growth, the label also concentrated efforts on ongoing expansion, opening 10 mainline stores across the globe during the second half and closing two.
Burberry’s rebuilt Chicago flagship opened during the period, as well as its menswear standalone store in London’s Knightsbridge, three new stores in Brazil and a further trial store in Japan, increasing its average retail selling space by 14 per cent.
Although European LFLs were broadly flat and the Americas saw single-digit growth, the strength of its offering within emerging markets has meant that the label’s growth plans will continue in the months ahead.
For the year ending March 31st 2014, Burberry is set to open approximately 25 mainline stores while closing around 15 a well as opening 10 concessions and closing the same number.
The strong appetite for Western luxury in emerging markets such as China and Latin America has seen growth plans focus on these regions and the group said that, after two years of higher than average space growth, net new openings are expected to contribute “low to mid single-digit percentage growth” to its retail revenue for the end of the 2014 financial year.
Although the struggles of the luxury market have been well-documented given the current economic climate, experts believe that these latest figures from Burberry highlight the fact that it is still a safe option for investors.
James McGregor, Director of retail consultancy Retail Remedy, said: “Burberry is unlikely to deliver exceptional returns in the medium term but it does have a very sound and robust strategy for growth.
“Growth continues to be driven by new space and new markets, specifically Asia Pacific and China.
“Key to Burberry’s resilience is its focus on delivering experience-based shopping environments through its flagship stores, backed up by a sleek digital platform.
“Burberry continues to set the trend and the global appetite for the brand will ensure it delivers stable, if not exceptional, growth in the medium term.”
Burberry’s commitment to product, marketing and customer service helped it to deliver solid growth over the festive periods of Christmas and Chinese New Year and Angela Ahrendts, Burberry CEO, believes that continued innovation is critical to the brand’s success.
Commenting on the label’s future strategy, Ahrendts said: “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.”