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Burberry points to digital growth against a backdrop of falling retail sales and profits

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Burberry today said digital sales and traffic grew in all regions following the launch of its redesigned website. Mobile accounted for more than 50% of digital traffic in the first half of its financial year, while digital revenue from third-party retailers grew and is now worth more than 50% of the digital sales generated in-house.

The retailer launched a redesigned desktop website and is now developing both a mobile website, with improved payments and fulfilment, and a customer app with improved mobile checkout and a more personalised approach to customers.

Digital innovations during the first half included enabling WeChat users to buy its Bridle bag on the social media platform.

The update came as the luxury retailer said overall sales fell by 4% in real terms in the first half of its financial year.

In the six months to September 30, Burberry , a Top250 company in IRUK Top500 research, reported revenue of £1.16bn. That was up by 5% compared to the same time last year when reported in sterling, which has weakened in recent months, but down by 4% in real terms.

Top-line profits of £146.2m were 4% down on the £152.9m reported at the same time last year, but one-off costs of £44.2m, related to writedowns on its fragrance and beauty licensing, which it is taking in-house, and to restructuring costs, meant that at the bottom line pre-tax profits of £102m were down by 34% on last time.

But Christopher Bailey, chief creative and chief executive officer, said the business was on track to deliver its financial goals.

“In May we outlined plans to evolve how we work as a business and to drive Burberry’s future growth in a rapidly-changing luxury environment,” he said. “Since then, we have made good early progress towards realising the significant opportunities ahead of us, as we begin implementing our five strategies.”

Those strategies including leadership in ecommerce, as well as building both brand reach and engagement, producing new and innovative products to suit local audiences, as well as ensuring that its retail space is used to develop customer relationships and that its operations are simpler and more efficient. The company is currently working on new technology solutions including a new inventory management system and a store staff scheduling software that is set to launch next year.

On ecommerce leadership, it said in today’s half-year statement: “Ecommerce is the fastest growing channel in the industry. We aim to leverage the strong digital capability we have built to drive revenues both on our own platform and through third-party relationships.”

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