Burberry revival gets a boost from China and US sales
Burberry has recorded a lift in sales across all its fashion lines for the first time in three years as a resurgence in the US and China helped ease a slowdown in spending brought on by the Iran war.
The London-listed fashion label posted a five per cent rise in overall revenue in the three months to July, driven largely by a double-digit boost in the Americas and nine per cent jump in its all-important China market.
Retail revenue rose from £433m to £455m, with boss Joshua Schulman pointing to the success of its fresh Portraits of an Icon campaign as having helped lure in new customers to its rainwear line.
Burbery has been pressing ahead with a root and branch turnaround for the past two years under chief executive Schulman, who has looked to refresh the heritage fashion brand after years of declining sales.
But Burberry’s European and Middle East arm weighed on overall performance, with year-on-year sales having fallen by some three per cent. Top brass said the ongoing conflict in Iran has led to “lower tourist spend”.
Even excluding the Middle East, which had been a source of growth for the fashion house before the war, revenue declined by one per cent in the region, bosses said.
The group reiterated guidance for the year, adding that it “remained mindful” that the uncertain geopolitical and macroeconomic environment could further dampen consumer confidence if the war drags on.
“For the first time in three years, we saw growth across our womenswear, meanswear, accessories and childrenswear divisions, anchored by the outperformance of outerwear” said Burberry chief executive Joshua Schulman.
“Our strategy is working. We are attracting a broad range of luxury customers across product categories… reinforcing my confidence in the opportunities ahead.”
The sales boost comes amid a swingeing restructuring plan at the designer label that has targeted some £100m in cost savings over just two years. The turnaround, launched last year, will see the company slash its headcount by about a fifth.
Burberry said it expects almost all of those savings to have been secured by the end of 2026, with a further 20 per cent of the £100m coming next year.