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Burberry sees strong performance in first half
14 Oct '08
5 min read
Americas remained the best performing region, while Europe and Asia both also showed growth in comparable store sales. There was good growth in Korea and smaller markets in Asia including Singapore and Australia and solid performances in France, Germany and the UK. Spain remained down double-digit.
In the first half, there was a 13% increase in average selling space year-on-year, with the net addition of five stores, 19 concessions and four outlets. Store openings included Bellevue (Washington), Burlington (Massachusetts) and Budapest, with additional space in Europe's premier department stores.
Wholesale
Wholesale revenue for the first half of the year increased by 15% on an underlying basis (23% reported). As previously highlighted, supply chain improvements enabled more of the Autumn/Winter 2008 merchandise to be delivered on time in the first quarter, rephasing deliveries between quarters compared to last year.
There were good performances in the first half from North America and Europe (both up over 20%). This reflected share gains due to strong product designs, compelling global advertising campaigns and more on-time deliveries. Wholesale revenue from Emerging Markets grew by over 50%, with particular strength in China, Russia, the Middle East and Eastern Europe. In the first half, a net five new stores were opened by Burberry franchisees, including those in Delhi, Cape Town and Kuwait. Spain remained challenging.
Licensing
Total licensing revenue in the first half decreased by 3% on an underlying basis (unchanged on a reported basis). Volumes in Japan were marginally down in both apparel and non-apparel, with growth from global product licences offset by the planned termination of menswear licences.
Outlook
Retail: In the second half, average selling space is expected to increase by 12% year-on-year.
Wholesale: For the second half, wholesale revenue in North America is expected to show further growth as the business continues to gain market share. Another strong performance is also expected from Emerging Markets. However, Spain is expected to decline by over 20%, reflecting the economic environment and the ongoing contraction of domestic independent retailers. As a result, Burberry is currently planning total wholesale revenue broadly flat on an underlying basis in the second half, dependent on final demand for in-season orders in these volatile markets.
Licensing: For the full financial year, Burberry now expects underlying licensing revenue to be slightly down, reflecting a modest softening in demand in Japan and lower output of certain global licensed products.
In the first half, there was a 13% increase in average selling space year-on-year, with the net addition of five stores, 19 concessions and four outlets. Store openings included Bellevue (Washington), Burlington (Massachusetts) and Budapest, with additional space in Europe's premier department stores.
Wholesale
Wholesale revenue for the first half of the year increased by 15% on an underlying basis (23% reported). As previously highlighted, supply chain improvements enabled more of the Autumn/Winter 2008 merchandise to be delivered on time in the first quarter, rephasing deliveries between quarters compared to last year.
There were good performances in the first half from North America and Europe (both up over 20%). This reflected share gains due to strong product designs, compelling global advertising campaigns and more on-time deliveries. Wholesale revenue from Emerging Markets grew by over 50%, with particular strength in China, Russia, the Middle East and Eastern Europe. In the first half, a net five new stores were opened by Burberry franchisees, including those in Delhi, Cape Town and Kuwait. Spain remained challenging.
Licensing
Total licensing revenue in the first half decreased by 3% on an underlying basis (unchanged on a reported basis). Volumes in Japan were marginally down in both apparel and non-apparel, with growth from global product licences offset by the planned termination of menswear licences.
Outlook
Retail: In the second half, average selling space is expected to increase by 12% year-on-year.
Wholesale: For the second half, wholesale revenue in North America is expected to show further growth as the business continues to gain market share. Another strong performance is also expected from Emerging Markets. However, Spain is expected to decline by over 20%, reflecting the economic environment and the ongoing contraction of domestic independent retailers. As a result, Burberry is currently planning total wholesale revenue broadly flat on an underlying basis in the second half, dependent on final demand for in-season orders in these volatile markets.
Licensing: For the full financial year, Burberry now expects underlying licensing revenue to be slightly down, reflecting a modest softening in demand in Japan and lower output of certain global licensed products.
Burberry Group plc
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