BURBERRY IPO STILL IN THE WORKS
Byline: James Fallon
LONDON — A Burberry initial public offering is still in the cards.
Burberry’s parent company Great Universal Stores PLC said Thursday that it still hoped to sell up to 25 percent of its luxury goods subsidiary on the London Stock Exchange by June 2002, “subject to market conditions.” The goal fits the same deadline GUS set when it announced in November 2000 that it planned a Burberry IPO.
GUS officials declined further comment on the possible IPO. There had been reports in the last few weeks that GUS would abandon its plans following the terrorist attacks on Sept. 11 and the subsequent acceleration in the global economic downturn. Prada earlier this month postponed its planned IPO for those reasons.
John Peace, chief executive officer of GUS, did not hide the fact that the global downturn is affecting Burberry, although its sales in the first half ending Sept. 30 continued to soar. In a statement released Thursday, Peace said sales in Burberry’s own stores fell 15 percent in the period from Sept. 11 to Sept. 30 “and on a weakening trend.”
Burberry’s stores account for about a third of its overall sales, which totaled $603.5 million in the year ended March 31. Burberry operates 58 stores worldwide and is due to open a new flagship in Beverly Hills at the end of October.
“Although the decline in travel and tourism is impacting the luxury sector as a whole, we expect domestic demand in Japan and Spain, which together account for about two-thirds of Burberry’s worldwide sales at retail value, to be less affected,” Peace said in a statement.
Rose Marie Bravo, Burberry’s ceo, said in an interview that there are signs consumers are beginning to shop again in New York, particularly in the suburbs, but business remained week in Hawaii and Las Vegas. “Anywhere that relies on tourists and tourism is being badly affected, but we are taking things day by day,” she said.
Burberry was continuing its rapid growth prior to Sept. 11, Peace said. In the first half ending Sept. 30, sales for comparable operations were up 31 percent, compared with the corresponding period a year ago. The underlying sales exclude Burberry Spain, which was acquired in June 2000, and fluctuations in currency. Including these factors, sales rose 28 percent.
GUS is expected to reveal more details of Burberry’s performance when it reports its first-half results on Nov. 29.