LONDON — With emerging markets such as China, the Middle East and Latin America continuing to blossom, Burberry Group plc is turning its attention to more mature ones — and in particular to its hometown of London.
On Thursday, as the company reported record profits and double-digit revenue growth across all regions and product categories for the year ended March 31, Burberry laid out plans to upgrade its store network in markets such as London, Hong Kong and Chicago.
It has earmarked 180 million to 200 million pounds, or $292 million to $324 million at current exchange, in capital expenditure for the current year, with half of the money going to flagship openings and the remainder to refurbishments. Overall, retail space is set to grow by 12 to 13 percent in the 2011-12 fiscal year.
Some 20 million pounds, or $32.4 million, has been earmarked for London alone, where the company already has begun construction work. It plans to double the size of its Knightsbridge flagship, and move to a bigger, swankier address on Regent Street.
The stores will each be about 20,000 square feet, and chief executive officer Angela Ahrendts said Burberry will have doubled its retail square footage in London by 2012.
“The luxury sector is back in a very strong way worldwide — it is set to be up in the double digits in 2012 — and the opportunities for us in markets like London, Paris and Milan are glaring,” said Ahrendts during a joint conference call with chief financial officer Stacey Cartwright.
With regard to London she said: “A lot of our French and Italian peers have larger stores in our home market, so it’s an opportune time to invest here.”
The London stores, she added, attract a large number of international luxury shoppers from China, India, Russia and the Middle East and less than half of sales in London come from the domestic consumer.
Profits in the 12-month period more than doubled to 206.3 million pounds, or $321.8 million, from 82.2 million pounds, or $128.2 million, due to a 27 percent rise in sales, and record operating margins.
The company reported an adjusted retail and wholesale operating margin of 15.6 percent. That beat Burberry’s previous peak of 14.9 percent a few years ago, when sales were skewed toward wholesale.
Cartwright said the main drivers behind the margin growth were top-line performance, and the investment over the past five years in new SAP IT platforms that have given the company “more transparency, and the ability to plan and replenish stock. Put bluntly, we’re now able to run the business in a more efficient way,” she said.
Revenue grew to 1.5 billion pounds, or $2.34 billion, from 1.19 billion pounds or $1.86 billion. Figures have been converted at average exchange for the 12-month period. Burberry’s acquisition of its Chinese stores in September gave sales a boost in the year. In the current fiscal year, the Chinese stores will add 10 percent to selling space.
Burberry noted that outerwear contributed to more than half of apparel sales at retail, and nonapparel now accounts for 40 percent of retail and wholesale revenue. Nonapparel grew 35 percent thanks to robust sales of large leather goods.
“We’re past the ‘It’ bag styles and we’re selling men’s bags, women’s bags, the bags that Christopher [Bailey, Burberry’s chief creative officer] puts on the runway, the totes women wear to work and the styles that have become classics,” said Ahrendts during the call.
She added the company would soon be rolling out men’s accessories to all of Burberry’s stores worldwide.
@chanel and @pharrell dropped what’s being dubbed as the world’s most exclusive sneakers yesterday. The Adidas Originals NMD Hu, which Williams designed in collaboration with Chanel and @adidasoriginals, has a waiting list of over 120K people who pre-registered online at chanelatcolette.fr –– and only 500 pairs are on sale. The singer predicted the resale value of the shoes could reach $40K. Read the full interview on WWD.com. Link in bio. #wwdfashion (📷: Dominique Maître)
@imanshumpert is diving deeper into his creative endeavors and relaunching his clothing line, Post 90s, and is helping to raise money for the hurricane victims in St. Maarten with a jersey he’s designed with his brother. The Cleveland Cavaliers player talked to WWD about kneeling during the national anthem, working with fashion brands and how he wants to be more than an @nba player. Read the interview on WWD.com #wwdfashion (📷: George Chinese)
Not only does #TheProfit return to CNBC tonight, but @marcuslemonis has launched @shopmarcus, a new shopping and lifestyle retail experience in Aspen and Chicago, with more locations to come. The retail stores offer in-store stylists and a variety of contemporary womenswear selections.
“It’s life, I’m going to face it,” @mingxi11 sighed. “I fell, but you know, I think the most important thing is that I get back up. I had the love, the help from my sister — the girl next to me Gizele [Oliveira] — she’s so nice. When I went backstage everybody was trying to comfort me like ‘Oh Ming, it’s OK.’ I’m really, really touched. I think it’s them who gave me the courage to go back on stage for the finale,” Xi told WWD of her fall at the @victoriassecret fashion show. (📷: David Fisher) #wwdfashion #vsfashionshow #victoriassecret
@louisvuitton tapped @therealpeterlindbergh for its latest city-centric photo book, which is part of a series called Fashion Eye. The primarily black and white book captures the spirit of Berlin in 57 images shot between 1989 and 2019. “Berlin is an inspiration for me, more than a city. I mean @millajovovich is simply Berlin!” said Lindbergh. #wwdfashion
“You know, I think audiences expect a certain performance so I have to deliver to them what they’re expecting to a certain degree. But I’m also a different actor and a different person, I have my own spin on the character,” says @noahegalvin of his takeover of the leading role in “Dear Evan Hansen” following the departure of @bensplatt, who originated the role. Read WWD’s interview with the 23-year-old actor on WWD.com #wwdeye (📷: @jilliansollazzo)
For pre-fall 2018, @etro created richly-colored wonderland, using tapestries, textiles and wallpapers from the Eastern world at large. The line featured floral and graphic prints and jacquard motifs, like this two-piece look featured here. #wwdfashion (📷: Giovanna Pavesi)
@kith is moving into children’s. The men’s and women’s streetwear brand has launched Kidset, a Kith kids line located in New York at 64 Bleecker Street. The line includes mini versions of staple Kith pieces like the Astor bomber jacket and the Kith box logo sweatshirts, along with a wall that can display up to 120 pairs of shoes from @adidas, @newbalance, @timberland and more. #wwdfashion
“I just wanted to create this fully rounded character, but I do think what excited me most was just the opportunity to give a group of people representation that I feel needs it. I like to do characters in projects that stand for something and Karolina definitely does, so that was really exciting to me,” @ginnygardner says of her new role in @hulu’s “The Runaways.” Gardner plays Karolina Dean, a queer superhero, which is a rarity for @marvel. Read more about Gardner’s character on WWD.com #wwdeye (📷: @dandoperalski)