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LONDON — Handbags and leather goods with variations on Burberry’s signature check fueled first-quarter revenue at the company, which posted an overall 30.6 percent sales jump along with double-digit increases in all distribution channels and regions, excluding Spain.
This story first appeared in the July 14, 2010 issue of WWD. Subscribe Today.
Burberry said Tuesday that sales rose to 282 million pounds, or $420.2 million, from 216 million pounds, or $321.8 million, in the three months ended June 30.
Figures have been calculated at average exchange rates for the quarter.
The revenue figure does not include Burberry’s Spanish operations, which are to be discontinued as of the fall season. Beginning with spring 2011, Burberry will sell its global collection, rather than the locally produced one, in Spain. Including Spanish operations, sales in the three-month period would have increased 27.1 percent to 291 million pounds, or $433.6 million, from 229 million pounds, or $341.2 million.
Chief financial officer Stacey Cartwright acknowledged in an interview that figures in the corresponding period last year were weak — revenue grew 8 percent as clients reduced inventories and the company was still in the heat of the downturn. But she described the 30.6 percent sales upswing as “high-quality” growth.
“There’s a momentum in the brand: Comparable-store sales [which does not include growth from newly opened stores] were up 10 percent in the period, and we are outperforming our U.S. department stores,” she said.
Top performers in the period included Burberry stores in the U.K., Italy, Germany, Hong Kong, and Taiwan. Burberry said store sales in the Americas grew in the low-single digits, as sales activity was significantly reduced for much of the quarter.
Chief executive officer Angela Ahrendts said in Tuesday’s statement the company plans to open 20 to 30 stores in the current fiscal year, predominantly in the Americas and the Asia-Pacific region.
Retail sales rose 21 percent, wholesale by 51 percent and licensing by 36 percent in the period. Cartwright said the improved timing of deliveries, monthly flow of goods and supply chain efficiencies contributed to the increase in wholesale sales, in particular.
The revenue figures beat the market consensus of 263 million pounds, or $391.8 million, and Citigroup’s projection of 259 million pounds, or $385.9 million.
“Sales growth in [Burberry’s] retail division was stronger than expected in Europe and Asia-Pacific. Of the 16 percent growth in retail sales, new space accounted for 6 percent, and comparable-store sales growth for 10 percent. This was despite less promotional activity, which bodes well for margins,” said Dennis Weber of Evolution in a report on Tuesday.
Cartwright said the big driver behind sales were large leather goods and handbags, which account for half of all nonapparel sales, and in particular the Haymarket, Nova, and Smoke check models.