Burberry today said it had increased its digital impact both on and offline in its latest financial year. The company reported sales growth but its pre-tax profits fell after a charge relating to the termination of its beauty licensing arrangements. It said its digital engagement was “at record levels”.
Revenues at the upmarket fashion retailer grew by 8% to £1.998bn in the year to March 31, but but pre-tax profits fell by 4% to £350.7m. Before exceptional items, however, adjusted pre-tax profits rose by 14% to £428.1m.
Burberry pointed to digital investment in areas including its website, burberry.com, moves to bring its digital and physical retailing closer together, and improved customer service and merchandising. “Digital was further optimized,” Burberry’s full-year statement said, “with innovative marketing and monthly global messages leveraged and synchronised online and offline, responding to rapidly changing consumer behaviour.”
The company also launched its flagship store in London’s Regent Street in August, which it described as “the largest and most digitally advanced physical brand experience to date, bringing all aspects of burberry.com to life.” While in-store traffic to its 206 mainline stores, 214 department store concessions and 49 outlets was generally characterised as “soft,” Burberry said online traffic and conversion were “significantly” up. The company has maintained its strength in social media, where it now has more than 15m Facebook fans. The launch video of its Spring/Summer 2013 advertising campaign was viewed 1.7m times on YouTube. Burberry also continued to put money into its digital presence overseas, investing especially in China.
Some 71% of Burberry’s overall revenue came from retail during the year, where sales grew by 12% during the year to £1.4bn as the company opened 23 main line stores. A further 24% came from wholesale and the remaining 5% from licensing. During the year, retail and wholesale operating profit grew by 17% while that from licensing grew by 3%. But bottom-line profits were hit to the tune of £82.9m, with exceptional charges incurred as a result of the ending of its fragrance and beauty licensing relationship. The company is now directly operating its own beauty business, established as of April 1.
Chief executive Angela Ahrendts said: “Finishing the year with a strong retail performance both online and offline, Burberry achieved record revenue and profit in 2012/13.
“Looking ahead, although the macro environment remains uncertain, Burberry is well positioned with opportunity by channel, region and product. With the integration of Beauty in April, we have added another exciting growth platform. Our brand momentum, proven strategies and closely connected global team provide confidence in Burberry’s future performance.”
