Burberry bullish despite Hong Kong sales collapsing
Burberry sales slumped by half in Hong Kong in the third quarter – but the British luxury-fashion label is lifting its full-year forecast as revenue elsewhere compensates.
Global same-store sales rose by 3 per cent as consumers continued to embrace the new collections overseen by incoming creative director Riccardo Tisci.
The company said the improvement was underpinned by growth in full-price sales although that was undermined in part by ongoing disruptions in the Hong Kong retail market and lower levels of marked-down inventory available.
Sales in Asia Pacific grew by a low single digit percentage driven by Mainland China up mid-teens. American sales were stable, while in Europe, Middle East and Africa, sales grew by a high single digit percentage.
“This was another good quarter as new collections delivered strong growth and we continued to shift consumer perceptions of our brand and align the network to our new creative vision,” said CEO Marco Gobbetti. “While mindful of the uncertain macroeconomic environment, we remain confident in our strategy and the outlook for the full year.
“We now expect full year total revenue to grow by a low single-digit percentage at CER compared to previous guidance of broadly stable. Adjusted operating margin is expected to remain broadly stable at CER despite the impact of disruptions in Hong Kong.”
The company said it was continuing to see a strong response from consumers to Riccardo Tisci’s new collections delivering double-digit growth compared to the prior year. “At the end of the quarter, new products accounted for about 75 per cent of the range in mainline stores.”
In China the company continued to focus on inspiring consumers.
“At the end of December we launched our Lunar New Year campaign which has generated a strong early consumer response. In addition, preparations are underway to take our Autumn/Winter 2020 runway show to Shanghai in April and open our first social retail store in Shenzhen, in partnership with Tencent, in the first half of next financial year.”
In Japan, the company opened a new flagship store at the Ginza Marronnier building in Tokyo and globally the company continued to refresh stores with about 60 now completed.