Burberry profits rise after marketing drive

LUXURY goods firm Burberry posted a bigger-than-expected jump in profits today after opening new stores and boosting the brand's digital presence.

Burberry, which has manufacturing operations in Castleford and Keighley, said the profits haul of 215m, which was 23 per cent higher than a year ago and more than the 205m expected in the City, was achieved in "very challenging markets".

The company hailed the success of its sales strategy, which sought to "purify" the Burberry brand by closing inappropriate wholesale accounts and introducing a pricing policy which ensured that heritage products such as rainwear and cashmere scarves were never marked down.

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It also brought greater clarity to its offering through the labelling of Burberry London as its wear to work range and Burberry Brit as casualwear.

A larger proportion of its marketing spend was shifted online, boosting awareness and the reach of the Burberry brand.

It now has more than one million Facebook followers and its social media site, artofthetrench.com, has received more than seven million page views since its launch in November.

The company said its plans for the current financial year included an increase in capital expenditure to 130m from the 70m spent last year.

This will feature between 20 and 30 new stores in areas such as the Americas and Asia Pacific, as well as store refurbishments and investment in digital commerce.

Retail sales rose 19 per cent to 748.8m in the year to March 31, accounting for 58 per cent of total sales after it opened 21 stores in the year and closed nine.

There was double-digit like-for-like sales growth in Europe and Asia Pacific, with stores in London continuing to benefit from favourable currency movements and increased tourism.