LUXURY brand Burberry said the impact of foreign exchange rates would fade after weighing on profit and sales in the first half of its financial year.
The fashion company, which has launched a high-profile Christmas campaign featuring 12-year-old Romeo Beckham, son of soccer star David and designer Victoria, said trading remained tough, “with pockets of weakness in Europe.”
Burberry, which has strong links with Yorkshire, reported a 12 per cent drop in profit before tax for the six months to September 30 to £142m, which was broadly in line with market forecasts.
Foreign exchange rates shaved off £75m in revenue and £31m in profit in the company’s fiscal first half but should become less of a factor in the months to come, the company said.
“At current rates, we do not expect foreign exchange to have a material impact on underlying profits for the second half,” Burberry finance director Carol Fairweather said.
Burberry said demand from the Chinese, which fell significantly in recent months, had not really improved while spending by the Russians, which have seen the value of the rouble collapse in the past week, also remained lower.
However, the company said it continued to trade better than many of its peers in China, where it bought out franchise partners three years ago and where sales were up more than 10 per cent in comparable terms.
Burberry gave a detailed presentation of a digital strategy which it described as one of its main competitive advantages.
The brand said it had 18 million followers on Facebook and 140 of its more than 500 stores worldwide were equipped to let people come in and collect items they had ordered online.
Christopher Bailey, from Halifax, took over as chief executive in May, combining the role with that of chief creative officer.
Burberry employs more than 700 people in the region, with the vast majority at its busy factory in Castleford where it manufactures outerwear, including the iconic trenchcoat.
The company weaves gabardine fabric and heritage check linings at the Burberry Mill in Keighley.