Footfall declines but the big spenders still love Burberry

The group triggered a 20 per cent drop in its share price last month after issuing a profits warning, giving rise to fears that China’s demand for its luxury goods was in decline.

While shares have not fully recovered, the stock rose nearly eight per cent yesterday after the retailer – known for its red, black and camel check – revealed a 10 per cent rise in underlying retail revenues to £577m in the six months to September 30.

Burberry, which showcased its range at London Fashion Week during the period, said higher quality sales, such as its Prorsum range, offset a drop in customer numbers. Richard Hunter, head of equities at Hargreaves Lansdown Stockbrokers, said: “The underlying strengths of the company, which for the moment seem to have been dismissed by investors, remain intact and today’s statement shows some strong underlying growth.”

Burberry makes its heritage trenchcoats at a red-brick factory in Castleford employing 600 people.

The group also has a factory at Keighley, where it prints and weaves many of its fabrics.

In a separate announcement, Burberry said its fragrance and beauty categories would now be directly operated following the end of its existing licence relationship with Interparfums.

The group, which has 198 retail stores, 215 concessions, 49 outlet shops and 62 franchise stores worldwide, reported a three per cent rise in same-store sales.

However, the quarterly breakdown showed the like-for-like performance slowing from six per cent in the first quarter to one per cent in the second.

Burberry said Hong Kong, France and Germany were robust, while UK and China slowed in the second quarter.

Chief executive Angela Ahrendts said: “In a more challenging external environment, footfall declined but brand momentum remained strong, particularly with our higher spending luxury consumer.”

During the first half, Burberry opened 13 mainline stores and closed seven.

Openings are planned for Chicago, Shanghai and a standalone menswear store in Knightsbridge, London, as well as further stores in Brazil, Mexico and the Middle East.