BURBERRY posted a 10 per cent rise in fourth quarter sales thanks to a strong Christmas and Chinese new year, helping to ease fears of a slowdown in its key Asian market.
The FTSE firm’s luxury goods rival LVMH recently warned of sluggish demand in China due to a weakening in economic growth and a government crackdown on gifting.
However, Burberry’s results showed continued strong appetite for its luxury leather handbags, accessories and signature trenchcoats, with sales in the Asia Pacific region up 15 per cent to £447m.
The company said that Chinese New Year was a particularly strong time for the brand, with customers snapping up red products, because the colour symbolises good luck.
“There are lots of luxury brands out there [in China] and we think we are holding our own nicely,” said Stacey Cartwright, Burberry’s outgoing finance chief, who will be succeeded by Carol Fairweather in July.
“We see lots of opportunities for further growth. We have three great openings coming in Shanghai in the next six months which is a market where we have been underpenetrated up until now,” she added.
The group plans to open a total of eight stores in the country this year and 25 worldwide overall, with further expansion in Latin America.
Group sales rose to £503m in the fourth quarter of the year, taking revenue for the six months to 31 March to £1.116bn.
Retail sales, which now account for two thirds of the business, rose 13 per cent to £840m, as higher average spend helped offset lower numbers of shoppers coming through its stores.
Wholesale revenues – or sales through non-Burberry stores – fell three per cent, as expected, due to smaller firms struggling in weak European markets where tourist spending has slowed.
Shares rose 1.8 per cent to 1,289p.