Cool Britannia lives on

COOL Britannia is alive and kicking, or at least it is in the luxury goods market. The Chinese and Indians might be stealing a march on the UK when it comes to manufacturing, services, and just about everything else, but they want to do it while wearing high-end British brands. That’s good news for Burberry, which is expected to unveil double digit growth in like-for-like revenues when it reports on Wednesday.

Although investors might be put off by the group’s relatively high exposure to Europe, which accounts for 44 per cent of sales, luxury goods have proven remarkably resilient in the downturn. It also has very little exposure to Japan, the only truly mature market for this sector. It garners eight per cent of sales there, compared to 19 per cent for Bulgari and Hermes.

Its recent decision to buy 50 Chinese stores from its Hong Kong franchisee was also a sign that it is serious about emerging markets, where salaries are on the up while shifting social attitudes mean women are spending more.

Bid talk, now receding, has pushed the shares higher, but they’re still a sensible buy.