Tuesday 15 November 2011 8:30 pm
Profits rise as Burberry stays upbeat
BURBERRY’s chief executive Angela Ahrendts said demand across flagship stores in cities such as New York and Hong Kong was helping the group to defy the downturn, as the fashion house reported strong first half results. The 155-year-old British brand, known for its signature raincoats, made 60 per cent of retail revenue in 25 cities that are home to the world’s wealthiest individuals. Ahrendts said that while these cities were not immune from global volatility, places such as Hong Kong, Paris and Dubai were “cushioned” by their high population density and a reliable influx of high-spending tourists. Burberry has seen its shares fall by 30 per cent since hitting a high of £16 in July amid fears over the group’s exposure to the slowdown in the Chinese economy.
Shrugging off these concerns, Ahrendts said: “China is only about 10 per cent of the global revenue we reported, so it’s a strong market but it’s not a market Burberry is overly dependent on.”
The group posted a 26 per cent rise in profit before tax and exceptional items, to £162m, beating analyst forecasts of £160m. Net profit rose to £117.2m from £83.1m.
Burberry plans to increase retail space by 15 per cent in the second half, in new markets like Latin America.
Despite its upbeat results, shares in Burberry closed down 5.2 per cent £13.47 last night.