'A luxury brand with universal appeal': Burberry says turnaround strategy is working
Burberry has said its turnaround strategy is working, on the back of growth in North America and China, but spending in Europe has come under pressure amid the conflict in the Middle East.
Chief executive Joshua Schulman said he was pleased with the luxury fashion brand’s progress over the first quarter, as it pushes ahead with the Burberry Forward turnaround strategy launched in late 2024.
The business has refocused on its British heritage and altered its pricing strategy, shifting away from some of its ultra-luxury lines.
The London-listed business reported that retail revenues lifted by 5 per cent to £455m for the 13 weeks to June 27, compared with a year earlier. Growth was also supported by a 1 per cent increase linked to positive currency exchange rates.
It said the recent positive performance was supported by 12 per cent growth in its Americas business, and a 9 per cent rise in greater China.
China had a particular boost from local shoppers and strong demand from Gen Z customers, the brand said. Elsewhere in Asia, the business highlighted an 11 per cent increase in South Korea, linked to both local and tourist spending, but this was partly offset by a 2 per cent decline in Japan.
In Europe, the Middle East and Africa, the group reported a 3 per cent drop in sales, highlighting a drag from the Iran war and weaker tourist spending.
Burberry said recent sales growth was also supported by strong demand for raincoats, jackets and scarves, with outerwear sales up by double digits.
Mr Schulman, chief executive of Burberry, said: “For the first time in three years, we saw growth across our womenswear, menswear, accessories and childrenswear divisions, anchored by the outperformance of outerwear. Our strategy is working.
“We are attracting a broad range of luxury customers across product categories, channels and geographies, reinforcing my confidence in the opportunities ahead.”
In a call with reporters, Mr Schulman said that Burberry is a luxury brand with broad universal appeal. He added: “We’re very pleased with our continued growth in China and engagement with Gen Z there.”
"We’ve been doing a lot of localisation in the Chinese market.”
Richard Hunter, Head of Markets at interactive investor, commented “Burberry has declared that its strategy is working, and there can be little doubt that the group’s new leadership has injected a breath of fresh air into the brand’s fortunes.
“Burberry described the full-year results in May as a meaningful inflection point, and with good reason.
"This followed a previous annus horribilis which included the change of Chief Executive, suspension of the dividend and a first-half loss which sent the shares into a tailspin.
"However, the famous brand is regaining momentum, and this latest trading update has reported a further increase in sales which represents the seventh consecutive quarter of improvement since the new CEO was installed.”
Burberry recently started a two-year renovation of its Castleford facility in West Yorkshire, which it has described as reinforcing its commitment to making trench coats in the UK and preserving British craftsmanship.