Huge protests in Hong Kong hit Burberry’s sales due to the disruption in the area, although this was offset by a boost in sales on mainland China and the UK was boosted by the weak pound, the company has said.
Tourists in London took advantage of the lower prices to snap up new designs from chief creative officer Riccardo Tisci’s collection, which Burberry has hailed a “huge success” as they filter thought to the shop floor.
Chief financial officer Julie Brown said more than 50% of stock is now Tisci’s designs, compared with March this year. She also revealed that £170 black leather sleeves released as a limited edition B Series drop sold out in just 20 minutes.
On the demonstrations in Hong Kong, which have seen millions take to the streets in largely peaceful protests, she said: “We did see an impact from the protest. Our stores were impacted and this did contribute to a softer impact in the quarter. It’s not material at a group level but certainly at a local Hong Kong level.”
Brown also reiterated that a no-deal Brexit would “materially impact” the business in the short term, particularly with shipments of products in and out of the UK, and is holding regular planning meetings to mitigate the impact.
But she was pleased with the overall performance, revealing sales for the 13 weeks to June 29 rose to £498 million compared with £479 million during the same period a year ago.
The Asia Pacific market was the strongest, with “high single-digit” growth driven by mainland China, followed by “low single-digit” growth in Europe, the Middle East, India and Africa – driven by the UK and the weak pound.
Sales of accessories fell, but Ms Brown was particularly positive of the company’s dedication to handbags. She said: “We’re building out the architecture of bags.”
The finance chief added that 23 stores have been “aligned to the new vision” for Burberry, which includes plenty of the new products designed by Tisci, and 80 stores will be “aligned” by the end of the year.
Nine stores were closed during the period – as part of plans to close 38 stores – but Brown declined to reveal the locations, beyond saying they were mainly in the Asia Pacific region.