BURBERRY’S PROFITS CLIMB 110% IN HALF ON 4.2% GAIN IN VOLUME
Byline: James Fallon
LONDON — Burberry is finally heading in the right direction.
Great Universal Stores PLC, its parent company, said Burberry posted a 110 percent increase in profits to $6.7 million on a 4.2 percent rise in sales to $150.6 million for the half-year ending Sept. 30. This compares with profits of $3.2 million on sales of $144.5 million in the corresponding period a year earlier. Dollar figures are translated from the pound at current exchange rates.
The results are Burberry’s best performance in about 18 months. Under the direction of chief executive Rose Marie Bravo and creative director Roberto Menichetti, both of whom came aboard in 1997, Burberry’s made significant investments to reposition itself as a luxury brand. Results last year were also affected by the economic difficulties in the Far East, one of its major markets.
The company reported a 57 percent drop in operating profits to $16.9 million on an 18.7 percent drop in sales to $326.9 million for the year ending March 31.
Lord Wolfson of Sunningdale, chairman of Great Universal, said in a statement Wednesday that Burberry’s wholesale and retail sales picked up in most markets, including Asia.
Now that Burberry’s collections appear to be on the right track, the company is beginning to invest in its retail network. It recently opened a 3,000-square-foot store in Las Vegas, its first with a new format. It plans to open a 16,000-square-foot flagship on London’s New Bond Street next spring. Wolfson said a repositioning and remodeling program would follow throughout Burberry’s stores worldwide.
Overall, Great Universal reported a 10.1 percent drop in after-tax profits to $154.4 million from $171.8 million for the first six months of the fiscal year. Sales rose 3.8 percent to $3.99 billion from $3.85 billion.
The group’s main activities are in mail-order and database services; its largest single subsidiary is the database company Experian. The decline in profits in the first half resulted mainly from a sharp drop at its U.K. mail-order division.