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Digital outperforms for Burberry, but Chinese customers rein in their spending on luxury

Image courtesy of Burberry

Burberry collaborated with Apple and Snapchat to drive digital innovation in a half-year that saw digital and mobile sales outperform, it reported this week. But overall it saw a relatively modest rise in retail sales as customers, particularly in China, reined in their luxury spending.

The luxury retailer, a Top150 company in InternetRetailing IRUK research, focused on digital innovation during the first half of its financial year, becoming the first global brand to launch a dedicated channel on Apple Music, and working with Snapchat to preview its runway shows.

Burberry today reported total revenue of £1.1bn in a first-half trading update. Retail sales of £774m were up by a relatively modest 2% in what the trader described as “an increasingly challenging environment for luxury customers.” It said that in the second quarter of the year demand from luxury consumers, particularly in China, was “affected by a more challenging external environment.”

That contrasts with an 11% rise in sales reported in Burberry’s latest full year figures.

“The external environment became more challenging during the half, affecting luxury consumer demand in some of our key markets,” said Christopher Bailey, chief creative and chief executive officer.

“In response, we have intensified our focus on driving sales and productivity, while taking swift action on discretionary costs.

“While mindful of this external volatility, our plans for the festive season position us well to return to a more positive sales trend in the all-important second half. Looking further ahead, we maintain our focus on – and confidence in – the long-term growth opportunities for our business across channels, regions and product categories.”

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