TRENCH coats made in Yorkshire have helped Burberry to deliver an increase in half-year sales, although the company warned that trading conditions are getting tougher.
The luxury brand group’s shares fell yesterday, even though the London-based company reported a 14 per cent rise in underlying sales for the six months to September, and said it was well-placed for the key festive period.
Burberry is also benefiting from the recent cooling in the pound’s strength. The brand’s signature trench coats are made in Castleford.
However, the company is concerned that Chinese consumers might be starting to tighten their belts. Halifax-born chief executive Christopher Bailey, who is also Burberry’s chief creative officer, said it had been a strong first half of the financial year.
He added: “Looking ahead, while mindful of the more difficult external environment, we have never been better prepared internally for the all-important festive periods.”
Retail sales in the first half increased by 15 per cent on an underlying basis and by eight per cent at reported exchange rates. Like-for-likes sales growth was 10 per cent.
Burberry highlighted the good performance of its rainwear, which was driven by the relaunch of its heritage trench coat.
Burberry’s retail arm achieved double-digit like-for-like sales growth in Asia Pacific, but in the second quarter the region saw some softening in growth from Chinese consumers. It added that a more cautious approach from customers selling to European consumers and in the Asian travel retail markets meant that wholesale revenues, at constant exchange rates, were expected to be down by a mid single-digit percentage in the current half-year to March 31.
Across the group, revenues were £1.1bn in the half-year period, with £748m coming from its retail channel.
During the first half, Burberry opened nine mainline stores and closed eight, giving it 216 retail stores, 224 concessions, 55 outlets and 66 franchise stores. Six airport stores were opened during the first half.