The Burberry Prorsum 2013 spring/summer collection catwalk show at London Fashion week. Photograph: Ian Gavan/Getty
Strong demand for handbags and high fashion in China and Hong Kong helped Burberry to deliver better than expected sales in the first three months of this year.
The brand famous for its raincoats, and with adverts fronted by supermodel Cara Delevingne, said wholesale sales in Europe had slumped as its stores experienced a drop in visitor numbers amid the ongoing economic crisis.
But underlying sales in its stores rose 8% in the three months to the end of March, with double-digit increases in China and Hong Kong. That growth comes despite concerns about a slowdown in growth in China and fears of a financial crash amid high levels of debt within local governments. Ratings agencies Fitch and Moody's have both cut their outlook for the country's debt rating from positive to stable in the last few weeks.
Angela Ahrendts, chief executive, expected the global economic environment to remain challenging but said Burberry was aiming to make the most of "significant opportunities that exist for the brand across geographies and product divisions, with particular emphasis on unlocking the potential of our digital platform and our newly-integrated fragrance and beauty business".
Analysts said Burberry was outperforming rivals such as Louis Vuitton in Asian markets as it continued to deliver attractive items. Louis Vuitton this week posted its lowest quarterly sales growth since 2009.
"Burberry continues to execute well, driving improved conversion, further elevating the brand and improving average unit retail selling prices," said analysts at Nomura.
The company plans to open 25 new stores and 10 new concessions, mainly in China and Latin America, while closing outlets elsewhere as it focuses on its fastest growing markets.
Overall growth at the brand's own stores, which now account for three-quarters of sales, rose in the quarter compared with the previous three months as shoppers bought more of Burberry's most expensive items including its Prorsum catwalk range and the Orchard and Blaze handbags.
Total sales were up 9% in the six months to the end of March to £1.1bn as the company opened 10 new stores including a Chicago flagship, a menswear standalone store in London's Knightsbridge and three stores in Brazil.
abhishek kumar
pgdm 2 sem
The brand famous for its raincoats, and with adverts fronted by supermodel Cara Delevingne, said wholesale sales in Europe had slumped as its stores experienced a drop in visitor numbers amid the ongoing economic crisis.
But underlying sales in its stores rose 8% in the three months to the end of March, with double-digit increases in China and Hong Kong. That growth comes despite concerns about a slowdown in growth in China and fears of a financial crash amid high levels of debt within local governments. Ratings agencies Fitch and Moody's have both cut their outlook for the country's debt rating from positive to stable in the last few weeks.
Angela Ahrendts, chief executive, expected the global economic environment to remain challenging but said Burberry was aiming to make the most of "significant opportunities that exist for the brand across geographies and product divisions, with particular emphasis on unlocking the potential of our digital platform and our newly-integrated fragrance and beauty business".
Analysts said Burberry was outperforming rivals such as Louis Vuitton in Asian markets as it continued to deliver attractive items. Louis Vuitton this week posted its lowest quarterly sales growth since 2009.
"Burberry continues to execute well, driving improved conversion, further elevating the brand and improving average unit retail selling prices," said analysts at Nomura.
The company plans to open 25 new stores and 10 new concessions, mainly in China and Latin America, while closing outlets elsewhere as it focuses on its fastest growing markets.
Overall growth at the brand's own stores, which now account for three-quarters of sales, rose in the quarter compared with the previous three months as shoppers bought more of Burberry's most expensive items including its Prorsum catwalk range and the Orchard and Blaze handbags.
Total sales were up 9% in the six months to the end of March to £1.1bn as the company opened 10 new stores including a Chicago flagship, a menswear standalone store in London's Knightsbridge and three stores in Brazil.
abhishek kumar
pgdm 2 sem
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