Recovery underway at Burberry, despite continued uncertainty

Fashion house Burberry has recorded revenues of £878m – a drop of 31% – in its interim results for the 26 weeks ended 26 September 2020.

The business, which has bases in Castleford and near Keighley, also reported pre-tax profits of £73m (2019: £193m) with adjusted operating profit down 75% to £51m.

But the business says it is managing to rebuild following the slump earlier in the year, with improvement in its comparable store sales to -6% in quarter two FY2021 from -45% in quarter one FY2021 and a return to growth in October

Burberry says quarter two of FY2021 saw strong double digit growth in Mainland China, Korea and the US, though EMEIA, Japan and South Asia Pacific remain impacted by the significant reduction in tourism.

It also reports excellent growth on digital sales and good brand traction as it attracts new and younger customers.

Its outlook statement adds: “We are encouraged by the recovery in quarter two FY2021 but remain conscious of the uncertain macro-economic environment caused by COVID-19.

“We currently have more than 10% of our stores closed globally following the recent lockdowns in EMEIA.

“With the brand resonating and attracting new and younger consumers, we have taken the decision to reduce markdowns and this will be a revenue headwind in H2 FY2021 with the main impact in Q3 FY2021 but will serve the long term interest of the brand.

“We are well positioned to continue to drive performance and deliver growth in the medium term.”

Marco Gobbetti, chief executive officer, said: “Though the momentum we had built was disrupted by COVID-19 at the start of the year, we were quick to adapt, while making further progress against our strategy.

“While the virus continues to impact sales in EMEIA, Japan and South Asia Pacific, we are encouraged by our overall recovery and the strong response to our brand and product, particularly among new and younger customers.

“In an environment which remains uncertain, we will continue to deliver exceptional product, localise plans and shift resources, while leveraging the strength of our digital platform to inspire customers.”

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