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Burberry reports 32% sales rebound as demand picks up in Asia and the US

Lauretta Roberts
13 May 2021

British luxury house Burberry has revealed that sales rebounded by 32% in its final quarter thanks to strong demand from wealthy shoppers in Asia and the US.

The group said the fourth-quarter bounceback in like-for-like store sales came despite 16% of its shops globally still remaining closed due to lockdowns as it resumed dividend payouts to shareholders.

The performance helped limit the fall in full-year revenues to 11%, or 10% at constant exchange rates, with retail turnover down 9%. Total group revenues for the year were £2.34bn.

Burberry posted a 12% drop in underlying pre-tax profits of £366m for the year to 27 March.

Underlying operating profits were 9% lower at £396m, but surged to £521 million on a reported basis from £189 million the previous year.

Burberry said it expects revenues to continue recovering over the year ahead, with growth in the “high single” digits, though an ongoing push to reduce markdowns will constrain its like-for-like performance.

It restarted dividends with a 42.5p a share full-year payout, matching 2019 levels.

The group said full-price sales jumped 63% in its final quarter, driven by demand in mainland China, Korea and the United States.

Burberry has benefited from stores being open again in these areas, even though sites across Europe remained shut due to Covid-19 restrictions.

The company has also been focusing on selling more products at full price, rather than with discounts,  and leveraging its digital resources to support both offline and online sales.

Within its Mainline range, Burberry said it continued to invest in upgrading the store portfolio with 11 new openings and 15 closures this year and also developed a new store concept, which will begin to roll out in early FY22.

In addition, the luxury house increased its focus on in-person and virtual appointments to mitigate the impact of reduced traffic and drive traction with local customers. This, Burberry said, contributed to growth in sales to local clients in most regions.

Burberry

Burberry Shenzen

The company also leveraged its digital capabilities to bridge online and offline, including scaling its omnichannel journeys (e.g. virtual appointments, virtual client events) as well as pioneering "social retail" – launching its first social retail store in Shenzhen Bay.

New collections from chief creative officer Riccardo Tisci are said to have resonated strongly, supporting double digit growth in full-price sales to both new and repeat customers.

In addition, within full-price, Buberry's strategic pillars - leather goods and outerwear - have returned to mid and high single digit growth respectively for FY21. Strong performance in leather goods has been supported by new established shapes including the Pocket, which was the focus of the house's first bag campaign and programme of pop-ups earlier in the year, and the Olympia, its newest shape and the focus of its upcoming bag campaign in May.

Burberry Olympia

Across outerwear, Burberry said it had focused on elevating and diversifying the offer. For example, in January it launched Future Archive, a new capsule reinterpreting outerwear classics from the Burberry archive.

CEO Marco Gobbetti said: “In spite of Covid-19, we achieved our objectives for the period and delivered a strong set of results in 2020-21, ending the year with good full-price sales growth.

“In this next chapter, supported by these foundations and the strength of our teams, we will accelerate our growth.”

But the results showed the difficulties in trading across the UK and Europe throughout recent Covid lockdowns and the absence of travel spend, with annual comparable store sales plunging 44% across the wider Europe, the Middle East, India and Africa region.

“The UK remained challenged, with London performance weak given high tourist exposure,” Burberry said.

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