BURBERRY "ENCOURAGED" DESPITE DROP IN SALES
15 July 2020
Burberry has recorded a further drop in sales in the first quarter of the financial year but the luxury fashion brand said it was "encouraged by the improving trends in all regions".
In a trading updated, the listed company reported retail revenue of £257m for the 13 weeks ended 27 June 2020, down 45 per cent from £498m in the same period of 2019.
Europe, Middle East, India and Africa (EMEIA) sales fell by about 75 per cent, impacted by lockdown measures and a significant reduction in travel. Sales in the Americas declined by 70, also as a result of lockdown measures.
Burberry's Asia Pacific sales declined 10 per cent in the quarter but returned to growth in June. Within this, Mainland China grew ahead of the January pre-Covid-19 level of 30 per cent in June.
Chief executive Marco Gobbetti said: "In Q1, sales were severely impacted by the drop in luxury demand from Covid-19 and we expect it will take time to return to pre-crisis levels with the resumption of overseas travel.
"We are encouraged by the improving trends in all regions and the promising exit rate for June. We saw an excellent response to new product launches in recovering economies as well as online. Demand for leather goods was particularly strong in Mainland China and Korea, bringing new, younger luxury customers to the brand.
"As we enter the second phase of our strategy, we are sharpening our focus on product and making other organisational changes to increase our agility and generate structural savings that we will be able to reinvest into consumer-facing activities to further strengthen our luxury positioning."
Burberry has manufacturing operations in Castleford and Keighley, as well as a shared services centre in Leeds.