Burberry's share price drops more than six per cent as overall revenues fall

 
Helen Cahill
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Burberry has been targeting the Chinese market (Source: Getty)

Burberry saw underlying retail sales rise in the last half year as the fall in the value of sterling since June masked a decline in overall revenues.

The fashion house's share price was down 6.47 per cent at the time of writing to 1,591p.

The figures

Comparable retail sales increased by three per cent in the six months to the end of March, after a two per cent rise in the last quarter.

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However, underlying wholesale sales fell by 13 per cent, leading to a combined retail/wholesale revenue dip of one per cent on a comparable basis.

Total revenue fell one per cent to £1.61bn.

The firm said it has completed £100m of its £150m share buyback.

Why it’s interesting

Burberry has, like many luxury brands, been benefiting from the fall in the value of the pound, as tourists flock to London, stocking up on relatively cheap designer goods. Today, the fashion house said it was making "continued exceptional performance" in the UK. However, sales in France and the Middle East "remained challenging" due to fading tourist numbers.

Read more: £3.5m share bonus for outgoing Burberry CEO

The firm has been focusing on growing sales in China, teaming up with Chinese celebrities to boost its brand with the nation's growing middle-class. Several Chinese celebrities were invited to Burberry's most recent catwalk show, and Chinese tourists gathered outside the event to get a look. The number of visitors to the catwalk show jumped 50 per cent compared to September.

Burberry - Runway - LFW February 2017
Burberry's Christopher Bailey at the firm's last catwalk show (Source: Getty)

And, the PR push appears to have worked, with Burberry's sales returning to growth in China, with sales in the "high single digits". However, growth in Asia Pacific sales has been hindered but dropping footfall in Hong Kong.

What the company said

Christopher Bailey, chief creative and executive officer, said: "In an uncertain environment, we continue to take action to strengthen the brand and reposition Burberry for growth.

"The outperformance of fashion and the strong customer response to new products underline our renewed creative momentum.

“While we have more to do, as we build on our progress so far, we remain confident about Burberry's prospects in the longer term."

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