LONDON — Profits at Burberry Group plc shot up 32 percent to 66.1 million pounds, or $132.4 million, from 49.9 million pounds, or $92.3 million, in the six months ended Sept. 30.
The increase was due to a rise in first-half revenues as well as a 15.1 million pound, or $30.2 million, gain from the sale of Burberry's central London headquarters in Haymarket, just off Piccadilly, the company said Wednesday.
Burberry staff will relocate to new offices, in Westminster near the Thames river, in late 2008. All figures have been converted at average exchange rates for the respective periods.
Last month, the company reported that revenues in the six months ended Sept. 30 rose 14.5 percent to 449.1 million pounds, or $899.5 million, from 392 million pounds, or $725.5 million, with some of the fastest growth coming from the nonapparel category.
During a press conference Wednesday, chief executive Angela Ahrendts laid out plans for the company, and was upbeat about the outlook for luxury — despite potential repercussions from the subprime mortgage crisis in the U.S.
"We're still rather bullish on luxury. The luxury customer tends to be insulated from market changes," she said. "We're also looking to emerging markets like the Middle East, Russia and China. We feel very strongly about their potential."
Burberry has just opened its 34th Chinese store, in Beijing, and has one Indian unit, in Bombay, and one in the works in New Delhi, due to open next year. The company also plans to get behind its children's business, especially in Asia where it's mulling the idea of children's wear-only stores.
In the U.S., sales in the first half rose 29 percent, compared with a rise of 18 percent in the 2006-2007 fiscal year. Burberry currently has 61 retail units in the U.S., in addition to 105 department and specialty store wholesale accounts.
One of the biggest drivers behind sales was accessories, which grew by 35 percent year-on-year. Luxury handbags — including the best-selling Knight style — generated more than 50 percent of retail sales in the nonapparel category.
Eighteen months ago, Ahrendts said, Burberry's luxury handbag offering was tiny and represented 2 to 3 percent of the total nonapparel business. Ahrendts added handbag sales show no signs of slowing, and that other nonapparel categories are following suit. She said the shoe category is still small, but that sales had more than doubled in the first half.
“I see things on the hanger and I’m, like, ‘I never knew that color worked on me.’ It’s things you necessarily wouldn’t choose to wear, but once you put them on, you see why Janie is who Janie is." — Lily Collins on working with former "Mad Men" costume designer, Janie Bryant on creating looks for her role as Celia Brady's in Amazon series, "The Last Tycoon." 📸@jilliansollazzo #wwdeye
EXCLUSIVE: Sarah Rutson has been tapped to Build New American Fashion Group. The parent of Joie, Equipment and Current/Elliott hired the merchant to rev up its brands and expand its portfolio into designer, beauty and lifestyle categories. Read more on WWD.com, link in bio. #wwdfashion
Michael Kors' $1.3B Jimmy Choo deal has the company squaring off with Coach Inc. as both seek to build American powerhouses. Coach bought Stuart Weitzman in 2015 and Kate Spade just two weeks ago, but Michael Kors' acquisition may be putting pressure on its rival in the new push for scale. #wwdnews (📷: George Chinsee)
Meet actress Lucy Boynton, who plays opposite Naomi Watts in the recently released Netflix series "Gypsy." Boynton stopped by WWD to talk about her upcoming projects and her nomadic lifestyle. Get all the details on WWD.com. #wwdeye (📷: @dandoperalski)