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.
Issa Rae stopped by WWD's NYC headquarters to talk about season two of "Insecure," which premieres this Sunday on HBO. Click link in bio for all the details. #wwdeye (📷: @jgreenery; Styled by @mayteallende)
A Stella McCartney sketch of a custom dress made from protein-based silk in partnership with biotech lab Bolt Threads. The dress will be displayed at The Museum of Modern Art's upcoming design exhibition, "Items: Is Fashion Modern?"