Burberry has been bolstered by a return to growth in its Asian markets and a rise in tourists flocking to the UK to pick up luxury bargains as a result of the weaker pound.
The British luxury business posted a 4pc rise in revenues to £735m for the three months to December 31 while like-for-like sales climbed by 3pc due to strong sales of its Buckle Shield handbag and monogrammed leather goods.
The upbeat results were partly due to efforts to attract social media-savvy Chinese consumers by launching a collaboration with pop sensation Kris Wu, who was a former frontman to South Korean-Chinese supergroup EXO. Burberry credited a We Chat and fashion campaign with Mr Wu as boosting sales, as well as the launch of a local-language website in November.
China is a crucial market for Burberry, accounting for almost a quarter of sales due to a rampant expansion plan under previous chief executive Angela Ahrendts. As a result, the company has been one of the most exposed to a slowdown in luxury spending and has suffered a prolonged sales slump in the region over the past 18 months.
Burberry said that Hong Kong still proved challenging and that Beijing had been disrupted as a result of its store overhaul programme. If Beijing was stripped out, sales in China would have been up over 15pc during the period, the company said, without giving a real number for the region.
Meanwhile, the UK turbocharged Burberry’s performance with a 40pc jump in comparable sales. The company said that the quarter had been split “50-50” between tourists and domestic consumers but noted that shoppers had flocked from the US and Asia to take advantage of the weaker pound.
Burberry said that it had “moved” or increased its UK prices to offset the currency exchange effect in November.
In September Burberry launched its first ever “see now, buy now” catwalk, which Charlotte Cowley, head of investor relations, said had been “extremely popular” with consumers.
Unusually for a FTSE-listed company Burberry did not have a single executive available to answer questions due to the timing of a string of director departures.
Carol Fairweather, chief financial officer, and John Smith, chief operating officer, departed today while Julie Brown, formerly of healthcare group Smith & Nephew, joins as the replacement for both.
Ms Cowley said that as it was Ms Brown’s first day she would not be equipped to answer questions. Both Ms Fairweather and Mr Smith are said to be helping with a handover to Ms Brown.
Meanwhile, the group’s incoming chief executive Marco Gobbetti will serve out his first six months at the company in Asia due to contract obligations. Mr Gobbetti will have the title of executive chairman, Asia Pacific and Middle East until July 4 and will then become chief executive.
Christopher Bailey, who currently holds both chief creative and chief executive roles, will retain some control as ‘president’ of the business. Both Mr Bailey and Mr Gobbetti will report to chairman Sir John Peace.
Burberry shares rose 0.5pc in morning trade to £15.99.