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LONDON — Outerwear and large leather goods such as the Blaze and Orchard handbags helped boost Burberry’s first-quarter retail sales 21 percent, although the company said store traffic remains soft.
This story first appeared in the July 11, 2013 issue of WWD. Subscribe Today.
Retail sales in the three months to June 30 were 339 million pounds, or $522 million at average exchange rates for the period, due to what Burberry called a “standout” spring-summer season.
At constant exchange rates, revenue climbed 18 percent, with the lion’s share coming from same-store sales.
Productwise, Burberry said more than half the growth in the period came from outerwear and large leather goods, with men’s wear and tailoring also performing strongly.
By region, Asia-Pacific and the Americas notched double-digit comparable-store sales growth. There was “high-single-digit growth” in Europe, the Middle East, India and Africa, while Korea, which has been struggling for a while, showed early signs of improvement in the three-month period.
While footfall was soft offline, it grew strongly online, the company said, although it does not break out separate figures.
“Consumers are increasingly channel-agnostic. They don’t mind how they shop at retail. In China, customers will often research online, and then buy in-store,” said Carol Fairweather, chief financial officer designate, during her first solo conference call on Wednesday.
To wit, she added that Burberry has been trialing an in-store collection service in 23 flagship markets, with plans for a worldwide rollout later this year. In the U.K., customers who shop online can currently collect their merchandise at the brand’s Regent Street and Knightsbridge stores.
She also said that in-store iPads were contributing to sales growth and higher conversion rates, with shop assistants able to order merchandise immediately to “ensure we never miss out on a sale.”
Burberry handily beat analysts’ forecasts. “We appreciate Burberry’s brand momentum and ability to drive [sales] conversion in a weaker and more volatile traffic environment for luxury players globally,” said Thomas Chauvet at Citi in London.
He said the brand is reaping the benefits of “a strong and innovative product offering, in-store retail discipline and merchandising skills and…costly investments in social and digital media drivers of traffic and image.”
Burberry’s 21 percent growth in the first quarter of fiscal 2013-14 compares with 11 percent growth in the fourth quarter of last year.
Burberry reported only retail sales on Wednesday, and will publish wholesale sales figures for the first six months in October. As reported, Burberry expects underlying wholesale revenue, excluding beauty, to drop about 10 percent in the period to Sept. 30.
Angela Ahrendts, the company’s chief executive officer, noted that the macro outlook remains uncertain going forward, and that Burberry would continue to focus its investment in profitable, high-growth opportunities by channel, region and product categories.