Luxury fashion group Burberry has reported a rise in profit before tax of 26 per cent, totalling £162 million, for its first half period.
The brand saw an increase in like-for-like sales of 16 per cent compared to the same period last year, thanks to the opening of new stores globally and its entry into the Chinese market.
Burberry has managed to maintain a strong trading performance in spite of the ongoing global economic difficulties, and its gross margin rose by an impressive 240 basis points to 66.7 per cent in the six months to September 30th 2011.
This increase has been driven by the shift to retail which now accounts for 64 per cent of revenue compared to 57 per cent in the first half last year.
Strong financial results for the six month period has been attributed by the label to its ongoing focus in a number of key areas.
Angela Ahrendts, Chief Executive Officer, commented: “Burberry has delivered a strong first half, reflecting our continued investment in innovative design, digital marketing and retail strategies.
“This consistent performance, balanced across channels, regions and product divisions, is enabled by our closely connected global teams and creative thinking culture.”
Social media remains a priority for the group, who has over nine million fans on Facebook and recently developed a business profile on the social network Google + in the hope of connecting with even more customers globally.
Non-apparel development has also boosted sales, with men‘s accessories growing strongly in all channels and revenue up nearly 50 per cent year-on-year in mainline retail. This sector now account for about 15 per cent of non-apparel mainline retail sales, with significantly higher penetration online.
Operating profit increased by 25 per cent to £162.1 million in the period, while 64 per cent of revenue – compared with 57 per cent in 2010 – was generated from 187 mainline stores, 210 concessions within department stores, digital commerce and 44 outlets.
Retail sales increased by 45 per cent on an underlying basis, while wholesale accounted for 30 per cent of revenue generated from sales to department stores and emerging markets such as China, the Middle East, Latin America, Russia, India and Turkey.
Wholesale revenue excluding China increased by 20 per cent on an underlying basis in the first half, slightly exceeding guidance, the group said.
Looking forward, the brand is cautious over the current macroeconomic climate and admits that there is a chance of job losses, however there are plenty of reasons to remain positive according to brand.
