Burberry today reported rising sales as it finessed its customer engagement over social media and focused its distribution model towards luxury in the first quarter of its financial year.
Under the leadership of chief executive Marco Gobbetti, the upmarket fashion retailer is concentrating on its flagship stores and social media. It plans to refresh more than 80 stores and to close 38 secondary stores by the end of its current financial year. It is using social media in innovative ways to reach customers with the latest designs from its new chief creative officer Riccardo Tisci. At the same time, it is phasing out sales to non-luxury wholesalers.
So far, Burberry said today, it has closed nine of those smaller stores and has refreshed 23 of its flagship stores. It says it has “surprised and excited consumers” with new product drops in its social media-focused B-Series collection. At the same time it has grown its followers and engagement via social media platforms including instagram and WeChat. It has also introduced a new recyclable yarn, Econyl, made from nylon waste from landfill and plastics found in the ocean and which it has used both men’s and women’s outerwear.
Burberry says it has brought to its stores “a new architectural and visual concept” that reflects its new creative vision. It has also used in-store technology to improve the service that customers receive. It has trained staff to deliver “exemplary luxury service” and to use new digital tools to engage customers with its products.
The work has translated into improved sales growth. Retail revenues in the 13 weeks to June 29 came in at £498m, up by 4% compared to the same time last year, or 2% when currency fluctuations were discounted. Like-for-like store sales were up by 4%, an improvement on 3% recorded at the same time last year. Store space reduced by 2% at the same time. Burberry continues to forecast “broadly stable revenue” for the full year and says a £120m reduction in costs will keep profits steady – though most of its profits are expected to come in the second half of its financial year.
Chief executive Marco Gobbetti said: “This was a good quarter in our multi-year journey to transform Burberry. We increased the availability of products designed by Riccardo while continuing to shift consumer perceptions of our brand and align our network to our new creative vision. The consumer response was very promising, delivering strong growth in our new collections. We are on track with our plans and we confirm our outlook for FY2020.”
Burberry, a Top250 retailer in IRUK Top500 research, sells online and, as of June 29, from 230 retail stores around the world, 147 concessions, 51 outlets and 44 franchise stores.
Image courtesy of Burberry