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Rich pickings for Burberry as sales boom

BURBERRY sales soared by 12 per cent in the three months to the end of the year – confounding City forecasts.

The company took £380m in revenue over the period as it dropped unprofitable lines and kept a tighter control on stock.

Wholesale revenue – which comes from department stores that stock the group’s trademark red, black and camel coloured check design – rose five per cent while analysts had predicted a 16 per cent slump.

The rise indicated a return to the high street of well-off shoppers looking for luxury brands.
Shares in Burberry rose eight per cent or 49.5p to 649p after the trading statement.

Angela Ahrendts, chief executive of the company, said: “Burberry has delivered a strong performance in both retail and wholesale, as customers around the world responded positively to our collections, marketing and service initiatives.

“While continuing to plan cautiously for 2010/11, we are confident that our strategies by product, region and channel – underpinned by operational efficiencies – will drive profitable growth.”

However licencing revenue, earned on eyeware and fragrances, fell three per cent over the period.

Investec analyst Katharine Wynne said: “Retail growth is unlikely to sustain at these levels, but the real story here will be wholesale recovery in 2010”.