BURBERRY is stepping up spending on new stores to cash in on a boom in demand for luxury goods in Asia as it met forecasts with a 39 per cent jump in full-year profit.
Profit for the 12 months to the end of March were £296m with revenues up 27 per cent to £1.5bn.
The luxury British retailer said the investment would limit growth in profit margins in the coming year, sparking a retreat in its shares, which closed 4.6 per cent down yesterday at 1,260p, after recent strong gains.
Chief executive Angela Ahrendts said she was sure the spending would pay back in what she described as very strong recovery in demand for luxury goods, led by Chinese shoppers and tourists.
“It is time to get our retail footprint up to par with consumers’ perception of the brand,” she said.
The group said it would invest £180-200m in 2011/12, up from £108m in the year to the end of March.
About half will go on new shops, including 20 in fast-growing emerging markets like Brazil, India and Mexico, with the rest spent on upgrading and expanding shops in flagship cities like Chicago, Milan, Hong Kong and Paris, as well as doubling selling space in the group’s home city of London.
Burberry will spend £320m extending its store in the Knightsbridge district, as well as relocating and extending its store on major shopping thoroughfare Regent Street.