LONDON — Revenues at Burberry for the third quarter ended Dec. 31 rose 22.6 percent to 206 million pounds, or $394.6 million, on the back of strong retail sales of outerwear and luxury accessories, as well as an updated sales and delivery schedule.

The figures compare with sales of 168 million pounds, or $293.9 million, in the corresponding period a year ago. (Currency conversions were made at average exchange rates for the respective periods.)

This story first appeared in the January 17, 2007 issue of WWD. Subscribe Today.

Chief financial officer Stacey Cartwright said Tuesday it was the best quarter Burberry has had since it was listed on the London Stock Exchange five years ago. Analysts gave the numbers a thumbs-up, with Seymour Pierce calling them “excellent” and HSBC saying they were a positive surprise and higher than the bank’s expectations.

Sales rose across all geographic regions and channels in the period. Cartwright added that the increases would have been even bigger had it not been for currency fluctuations and, in particular, the weak U.S. dollar.

In a statement Tues­day, Burberry also revealed plans to expand its home in London. It will leave its Haymarket headquarters near Piccadilly, which is made up of a number of separate spaces, and transfer to one large office site in Westminster, near the Thames. All global operations, including design studio and showrooms, will be consolidated under one roof there by late 2008.

Cartwright said an updated selling model, introduced by Burberry chief executive Angela Ahrendts, was a big growth driver in the period. Burberry has increased its annual market sales periods to five from two. There is now a September market, with deliveries scheduled for February, and a March gift market.

“It’s about getting newness and freshness into the stores year-round,” said Cartwright in a telephone interview. “We want to keep the design and innovations flourishing throughout the year. Our customers always want new stimulation.”

Cartwright added that Project Atlas, Burberry’s ongoing information technology and operational overhaul program, is enabling the firm to deliver merchandise and replenish stock more frequently.

In the third quarter, retail sales rose 24.3 percent to 143 million pounds, or $273.9 million, from 115 million pounds, or $201.1 million, in the Christmas holiday quarter.

That growth came in part from the Spanish market, where Burberry has recently switched its distribution from wholesale to retail. It also came from new or refurbished stores in the U.S. and Europe.

As reported, the group continues to expand its stand-alone stores. It will increase retail selling space by 14 percent in the second half and by a total of 13 percent for the financial year, which ends in March.

In late March, Burberry will open its first U.K. retail store outside London, in Manchester, England. The 3,200-square-foot store, to be located near the city’s Harvey Nichols and Selfridges, will carry the Burberry Prorsum and London lines and offer the bespoke trenchcoat service.

Burberry has traditionally had a strong wholesale business in the U.K., but Cartwright said the time was right to seek growth through retail in its home market.

Wholesale sales in the period rose 19.4 percent to 43 million pounds, or $82.4 million, from 36 million pounds, or $62.9 million. The third quarter is generally not a strong one for wholesale, but Burberry has recently switched the timing for selected shipments from the first half to the third quarter.

The company has also increased its wholesale outlook for the second half and is now expecting a low- to mid-teen percentage increase in wholesale sales. This is due, Burberry said, to the new market calendar and replenishment program.

Licensing revenue in the quarter rose 5.6 percent to 19 million pounds, or $36.4 million, from 18 million pounds, or $31.5 million, led by Burberry fragrance launches last year and the watch collections. The company said it is expecting a mid- to-high single-digit percentage increase in licensing revenue in the second half.

Meanwhile, Burberry gave the financial details of the closure of its polo shirt factory in Treorchy, Wales, which it plans to shut because it is no longer commercially viable. The company said Tuesday it would incur a cash cost of 3.5 million pounds, or $6.9 million, to cover the redundancy packages, outplacement and training costs for employees, as well as a non-cash expense of 1.7 million pounds, or $3.3 million, linked to asset write-offs. Savings from the plant closure are expected to be 1.5 million pounds, or $2.9 million, annually.

The company will issue a second-half trading update and full-year revenue figures on April 17.

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