British luxury fashion group Burberry achieved a modest 1 per cent increase in global comparable-store sales in the third quarter, despite a plunge in Mainland China revenue.
With China’s ongoing Covid-19 crisis seeing rolling forced closures of stores across multiple provinces, the group’s trading was severely impacted, falling by 23 per cent. Excluding Mainland China, same-store sales rose 11 per cent.
CEO Jonathan Akeroyd said the company remained confident in its ability to reach medium-term targets, despite the current macro-economic environment.
“We are focused on executing our plan to realise Burberry’s potential as the modern British luxury brand and we look forward to unveiling Daniel Lee’s debut collection for Burberry on our return to London Fashion Week next month.”
The Europe, Middle East, India and Africa region drove most of the growth, rising 19 per cent, with Asia-Pacific declining by 7 per cent and the Americas by 1 per cent. While China heavily impacted Asian figures, the decline was partially offset by strong performances in South Korea, up 10 per cent, and Japan, up 28 per cent.
“Europe in particular continued to perform well, driven by strong trading over the festive period, and leather goods delivered another quarter of double-digit growth globally,” said Akeroyd.
The company is relying on a “strong program of brand activations” through the Lunar New Year period to boost sales, supported by pop-ups and social media driving customer engagement, including outerwear.
By category, outerwear sales grew at a rate in the high single digits outside Mainland China, along with accessories. Sales of women’s ready-to-wear items rose by around 16 per cent, underpinned by dresses and knitwear featured in Burberry’s seasonal campaigns.
The company is on track to complete the upgrade of 65 stores during the financial year, with 15 completed during the quarter, including at Pacific Place in Hong Kong. The company said figures from refurbished stores showed higher average unit sale prices and productivity.
Last year, Burberry closed a prominent Hong Kong flagship store.
