Burberry profits push ahead as the snood proves a fashion hit

Burberry's snoods – a cross between a scarf and a hood which sell for 195 – were one of the group's best-sellers in the three months to December while womenswear ranges also enjoyed healthy demand.

Accessories such as the firm's Sling and Woolf handbags also did well as Burberry posted a forecast-beating 10 per cent rise in like-for-like retail sales over the period.

Burberry said annual profits would be "towards the top end of market expectations", currently ranging from 175m to 200m.

"Customers around the world responded positively to our collections," chief executive Angela Ahrendts said.

Burberry, which has factories in Castleford and Keighley, said retail sales grew across all regions during the period, led by double-digit growth in the UK and Hong Kong. Although the company was up against weaker trading a year ago when the recession was at its height, its London stores have been bolstered by the weak pound, attracting foreign shoppers. Tighter stock control also meant the business discounted fewer items in sales.

Meanwhile, Burberry is also looking to drum up interest in the brand among the younger generation through its Art of the Trench website showing pictures of everyday people wearing Burberry trench coats.

Shares were rewarded with a 4 per cent rise following the update, as Burberry also forecasted a smaller than expected sales decline in its wholesale business during the second half of the year.

The firm had expected wholesale revenues to fall around 15 per cent during the period, but has revised this to 10-12 per cent after a 5 per cent increase during the third quarter.

Investec analyst Katharine Wynne said: "Retail growth is unlikely to sustain at these levels, but the real story here will be wholesale recovery in 2010 and the medium term growth opportunity for Burberry in developing markets."