16th Apr 2014 08:04
LONDON (Alliance News) - Burberry Group PLC Wednesday said that total revenue in its second-half of the year rose 16% on a reported basis, as sales growth continued to be driven by strong sales of its outerwear and leather goods, particularly in Asia.
The British luxury fashion retailer said its online business outperformed in all regions in the six month to March 31, increasing conversion both offline and online, while its stores performed well, boosted by travelling "luxury customers."
However, the retailer warned that the strength of the sterling has hit profits across the business, and is expected to continue to do so in the year ahead.
Burberry said that with the current strength of the sterling, it would wipe of about GBP30 million of its reported profit for it retail and wholesale division, and around GBP10 million in reported licence revenue.
Retail revenue in the second-half was up 11% on a reported basis, at GBP928 million, and up 13% at constant exchange rates, when compared with GBP840 million in retail revenues the prior year, boosted by double-digit percentage sales growth in Asia Pacific, led by China and continuing momentum in Korea.
Burberry said its core outerwear and large leather goods, together accounted for nearly half of the growth in retail revenues, while men's accessories, men's tailoring, its womenswear Prorsum Spring/Summer collection, and beauty, all performed strongly.
Wholesale revenues increased 52% to GBP333 million, up from GBP220 million a year earlier, of which GBP93 million came from beauty sales. Excluding beauty, wholesale revenue during the period was up 9% on a reported basis, which was supported by the re-phasing of shipments and slightly higher than expected in-season re-orders.
Licensing revenue in the second-half of the year came in at GBP37 million, compared with GBP56 million the prior year, which included a GBP16 million royalty income from its terminated fragrance licence relationship.
In the year ahead, Burberry said it will continue to invest in new stores, online, and its beauty business, which it bought back-in house last year.
It said it plans to open between 20 and 25 mainline retail stores in the year ahead, focused primarily on its flagship markets and travel retail, and as well as developing its store portfolio in China and the Middle East.
During the second-half of the year just ended, Burberry opened 11 mainline retail stores and closed nine, including store openings in Shanghai, Mexico, India and its first Burberry Beauty Box in Covent Garden, London.
Within its wholesale division, a net four franchise stores were opened in the second-half, including a first store with a new partner in Barbados and one additional store in Colombia, Indonesia and Vietnam.
Burberry shares were up 0.8% at 1,433.00 pence per share Wednesday morning.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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