Burberry profits rise as it reveals new strategy

Burberry’s profits and sales have risen, with the luxury group setting out a transformation plan for its future growth.

Pre-tax profits at the luxury brand, whose chief creative officer of 17 years Christopher Bailey is due to depart, shot up 26% to £128m in the six months to September 30.

Sales climbed 9% to £1.263bn, with growth led by retail like-for-likes, which rose 4% in its first quarter and 5% in its second quarter.

Conversion improved in all regions, spearheaded by a return of top-spending customers. Asia Pacific, where the weak economy had previously hurt Burberry, was particularly strong.

Chief executive Marco Gobbetti set out a transformation plan for the business, focused around sharpening its brand positioning by changing its approach to communication, customer experience and product.

He was tight-lipped on the exact details of his plan but said that the business aimed to deliver high single-digit revenue growth and “meaningful” operating margin expansion. Adjusted operating margin currently stands at 14.6% while gross margin is 69.2%.

Gobbetti said: “Now is the right time for Burberry to implement the next phase of its transformation. By re-energising our product and customer experience to establish our position firmly in luxury, we will play in the most rewarding, enduring segment of the market.

Source: Retail Week