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Best-of-British Burberry’s boost in demand

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Luxury label Burberry has announced a strong growth in sales following the festive period, as total sales rose by 15% for the three months to December 31.

With the brand’s heritage trench coats and cashmere scarves proving exceptionally popular, the British brand’s intensified focus on core categories and products instigated a huge boost in sales for the quarter. The renewal of Burberry’s trademark pieces came largely as a response to the brand’s Christmas advert featuring Romeo Beckham, which focused on trenches and scarves, as well as its ‘My Burberry’ campaign starring model-of-the-moment Cara Delevingne.

The brand also experienced huge demand for its runway inspired ponchos, which were sported by fashion icons including Olivia Palermo and Rosie Huntington-Whitely after the product’s catwalk debut.

Following analysts predictions of £579m (according to a median of estimates compiled by Bloomberg), Burberry has broken its estimations with retail revenue in the third quarter increasing by 15% underlying and 14% at reported FX. Like-for-like sales also increased by 8% to £604m with a double digit growth in the U.S., South America, Europe, the Middle East and Africa.

Chief Creative and Executive Officer Christopher Bailey described the brand’s growth in sales as a reflection of its “commitment to every element of the customer experience, from product, to marketing, to service,” explaining that Burberry intends to bring equal focus to maximise opportunities for the final quarter.

Supposedly due to a more “cautious approach” for wholesale stockists selling to European and Asian travel markets, wholesale revenue at constant exchange rates are still, however, expected to be down by a single-digit percentage in the six months to March 2015 from £240m in 2014.

The brand’s global performance is often regarded as mixed, as comparable sales in Hong Kong delivered low single-digit percentage growth, reflecting current disruption in the high margin market of Hong Kong. This makes it crucial for Burberry to focus on its Asian business and international operations.

Despite this, Burberry opened five new stores including relocations in Beverley Hills and Tokyo, as well as introducing a second dedicated beauty store in South Korea, causing comparable sales to climb by 8% with the balance of new space. These openings are now expected to contribute a further 5% total revenue growth for the full-year 2015, with beauty wholesale revenue expecting to increase by 25% at constant exchange rates for the 2015 financial year.

David Alexander, Consultant at Conlumino, commented that “global events seem to be conspiring against luxury retailers”, something that is concerning for Burberry due to its strategy to tap into emerging luxury markets, which could lead to harder budgeting decisions in the future.

Overall, Burberry still remains one of the most innovative brands in retail marketing, with a huge ecommerce presence across multiple channels. Burberry has proved the ability to access new levels of personalisation with customers, through its interactive “My Burberry” perfume campaign and the customer advice available on Twitter under #Burberrygifts.

The brand’s marketing success remains to produce increasing results, offering the best for customer’s needs both in-store and online. Bailey described how the Burberry team “worked tirelessly” over the festive period, resulting in sales that were much more promising than anticipated.

Published on Wednesday 14 January by Editorial Assistant
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