Burberry today reports strong growth in the first half of its financial year – despite a 19% fall in its mainland China market amid local lockdowns – and says it is now targeting £4bn in sales through both in-store and online channels. Sales rebounded in Europe, a year on from Covid-19 lockdowns.
The upmarket fashion brand aims to double its ecommerce revenues while boosting the share of sales that takes place online to 15%. It is targeting 50% higher sales densities in-store, with the aim of achieving £25k per square metre.
Planned strategies include further raising brand awareness through marketing and communication, while strengthening the brand’s relationship with existing customers through a loyalty-based approach to boost customer lifetime value.
The update comes as Burberry today reports revenue of £1.3bn in the 26 weeks to October 1 2022. That’s 11% up on the comparable period last year, the 26 weeks to September 25 2021.
Pre-tax profits of £251m were 31% up from £191m a year earlier.
Retail sales grew by 12% in total during the first half. Like-for-like store sales grew by 5% across the group, with the fastest growth in EMEIA (+34%) – with UK sales in line with the region average – as sales recovered from Covid-19 lockdowns a year earlier. However, LFL store sales were down in both Asia Pacific (-4%) and the Americas (-3%). Sales in mainland China fell by 19% – including 35% in the first quarter – as the effects of localised Covid-19 lockdowns were felt.
First-half highlights include 1.5m streaming views for Riccardo Tisci’s last show for Burberry, and the opening or renovation of 22 new concept stores, with plans to grow that number to 65 this year. Burberry says it is the first luxury fashion brands to receive approval from the Science Based Targets initiative for its net zero emissions target, and it also introduced the new UK real living wage pay rates, as set out by the Living Wage Foundation, six months early in the light of the rising cost of living.
“Burberry has an extraordinary legacy, a unique British heritage and a very strong platform to build on, as shown in our half-year results,” says Jonathan Akeroyd, chief executive of Burberry. “Our focus in this next phase is on growth and acceleration. We have a clear plan to achieve this across brand, product and distribution and a very talented designer in Daniel Lee, supported by a passionate team. I am confident in our ability to deliver our medium-term targets and realise our potential as the modern British luxury brand. I am excited about what we can achieve in pursuit of our long-term ambition to reach £5bn in revenue.”.
Burberry is ranked Top250 in RXUK Top500 research. It sells online and from 221 owned stores, 137 concessions and 57 outlets, as of October 1 2022. A further 38 stores operate through franchises.