LONDON — Burberry is defying market gravity.
This story first appeared in the October 16, 2002 issue of WWD. Subscribe Today.
The British fashion and accessories company said in a statement that total revenues had increased by 15 percent, or 9 percent on a comparable basis, in the first half ended Sept. 30.
The company plans to announce full interim results on Nov. 19.
Retail sales grew by 32 percent overall, and by 17 percent on a comparable basis. That growth came from stores and concessions added from Burberry’s recent Asian acquisitions and the opening of new units in Barcelona, Heathrow Airport, Hong Kong and Coral Gables, Fla.
Wholesale sales increased 8 percent overall, and 4 percent on a comparable basis. As reported, the company’s 2002-03 fall wholesale order book was flat against last year’s.
The company added that sales in the U.S. were strong during the period — a positive sign before the November opening of the refurbished New York flagship on 57th Street.
Burberry chief executive officer Rose Marie Bravo said the first-half boom was fueled by “growth in key product categories…and distribution channels.”
Mike Metcalf, chief operating officer, said: “We are delivering on our growth objectives in what is clearly a very tough environment. We are pleased with the progress.”
Indeed, other fashion and luxury goods companies like Gucci Group and LVMH Moët Hennessy Louis Vuitton are struggling with a downturn in sales growth due to a slowdown in tourism and weakening consumer confidence. (See related story above.)
In its first full report on Burberry, J.P. Morgan said it expects the company’s compounded annual growth rate to be 13 percent for sales and 16 percent for earnings over the next three years.
Burberry’s total licensing revenue increased by 14 percent —and 21 percent at constant exchange rates — driven by strong growth in Japanese royalties.
In the second half, Burberry said its spring 2003 wholesale order book will show “single-digit” growth over the previous year.
Later this year, the company will open a second London flagship in Knightsbridge and, during the second half of the fiscal year, it will open an additional six units, a mix of Burberry stores and outlets.