Burberry reports flat sales as market remains challenging

Burberry AW16

Burberry, which two days ago revealed it would install a new chief executive next year, has revealed unchanged underlying retail revenue for the three months to 30 June at £423m.

The British luxury brand said, however, that like-for-like (or comparable sales when net new retail space is factored in) were down 3%. Its home market of the UK delivered mid-single digit growth during the quarter and APAC, when the markets of Hong Kong and Macau were stripped out, also showed positive growth.

However all major regions as a whole, APAC, EMEIA and the Americas, saw low single-digit sales declines over the period. In Europe, the UK rallied towards the end of the quarter, but major markets such as France and Italy were affected by a large decline in “travelling luxury customers”. The Americas too were hit by fewer tourists and “uneven” domestic demand.

Digital was cited as a high point with 60% of traffic now coming through the mobile channel while customers as a whole were said to be responding well to new product innovations, such as the runway rucksack and lighter weight outerwear.

Chief executive and chief creative officer Christopher Bailey said external conditions remained challenging for Burberry (indeed for luxury as a whole) and the business would continue with its growth strategy revealed earlier this year.

“In this context, we continue to focus on managing our business with agility whilst implementing the ambitious evolution of our strategies and ways of working we outlined in May, to position Burberry for long-term growth. These plans are now well underway and on track to deliver our financial goals,” Bailey said.

On Monday it was revealed that Bailey would step down from the role of chief executive next year to become president and chief creative officer. Marco Gobbetti of LVMH-owned Céline, who has considerable experience in luxury retail, will take the chief executive position.