Burberry sees stellar sales in China
British fashion house Burberry has reported strong sales increases over the last three months, pushed in large part by an increase in demand in China. The company reported a 4% increase in like-for-like sales, but claimed that China saw sales growth in the “mid-teens”. It is the first set of results reported under new boss Marco Gobbetti, and will no doubt reassure him over the company’s prospects for the coming fiscal year.
Burberry’s been on a roll this week
SOURCE: Yahoo Finance
Mr. Gobbetti said: “we are pleased with out performance in the first quarter, while mindful of the work still to do. This is a time of great change for Burberry and the wider luxury industry. I look forward to building on the foundations Christopher and the team have put in place and creating new energy to drive growth.”
This sales rise is just what the company needed after reporting a fall in annual profits last year. Investors agree – Burberry’s shares jumped by 5% when the figures were reported mid-week. The company has said that it wants to save at least £100 million by 2019, and is on track to deliver half of that amount in 2018.
Hargreaves Lansdown fund manager Steve Clayton told the BBC: “this is an encouraging performance from Burberry, which looks to be at long last pulling out of the doldrums.”
He added that the company was likely to take more control of its distribution chain, and jettison some third-party retailers from its books:
“Some of them are not upmarket enough for Burberry and are not where they want their brand to be seen, so they will stop selling to them on purpose. But with an acceleration in new product launches set for the second half of the year, the underlying progress at Burberry should improve steadily.”
Dominion holds Burberry in its Global Trends Luxury Fund.
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