Sales rebound in China helps Burberry grow profits

Leather goods and coats boost luxury goods maker to a 'strong financial performance'

The Burberry Group outlet on Regent Street in London. Chinese demand fuelled fourth-quarter sales gains for the company. Bloomberg

The post-Covid opening up of China provided the boost the British luxury goods maker Burberry needed to get what it's chief executive called a “strong financial performance”.

Sales in the company's fourth quarter, which ran from January to March 2023, soared by 16 per cent on a same-store basis. Its stores in China recorded a 13 per cent increase in sales over the same period.

Leather goods and outerwear sales were up 12 per cent and 7 per cent higher respectively over Burberry's financial year, but were 15 per cent and 30 per cent higher in the fourth quarter.

Meanwhile, Burberry's operating profit for the year rose 21 per cent to £657 million ($819.61 million).

A model at the Burberry show during London Fashion Week in February. WireImage

“We have reorganised our supply chain, merchandising and digital teams under new leaders to drive our strategy forward,” Burberry chief executive Jonathan Akeroyd said.

“While the external environment remains uncertain, I am confident we can achieve our FY24 and medium-term targets as we focus on executing our plan to realise Burberry’s potential as the modern British luxury brand.”

Burberry creative director Daniel Lee during London Fashion Week. WireImage

It's been a time of change at Burberry and the revamped strategy, which included a new logo and marketing campaign, appears to be bearing fruit.

In addition, creative director Daniel Lee's first collection at London Fashion Week in February was very well received.

“The appointment of a new chief creative officer has shown early promise, with a successful debut runway show adding to a new brand aesthetic,” said Richard Hunter, head of markets at Interactive Investor.

“At the same time, the group remains committed to innovative and visible marketing campaigns, which capture the zeitgeist of high fashion and appoint ambassadors who are currently high profile in social media circles.

“The group is cautious on the immediate economic outlook, although its guidance remains unchanged, with a nearer term revenue target of £4 billion and the further refurbishment of full-price stores, which has already had a positive impact on profits given their fresh appeal.

“The group has also seen the benefits of its geographical diversification, allowing certain regions to pick up the slack when other economies may be slowing.”