Positive semester for Burberry: it accelerates in the second quarter and flies on the stock market
The British fashion house has closed the six months to September 28 last year with revenues in increase of 5% to 1.28 billion pounds (about 1.5 billion euros). In the first half of the year, sales on a like-for-like basis increased by 4%, with an acceleration (+ 5%) in the second quarter compared to the first (+4%). The pre-tax profit grew from 174.1 to 192.6 million pounds.
Adjusted pro forma operating income for the first half decreased by 4% to 187 million pounds. This, explained the London fashion house, reflects the pressure on the gross margin deriving from investments on the quality of the offer and more substantial discounts on the older product lines, as well as 14 million pounds in devaluations of the shops that suffer the disorders of Hong Kong .
“We are satisfied with our performance in the first half of the year and we are in line with the achievement of the objectives of the first phase of our strategy – commented Burberry CEO, Marco Gobbetti -. The new products now represent a high percentage of our assortment and the customer response has been positive, with double-digit growth. We continue to support the new momentum of our brand and transform distribution. The results are in line with our guidance, despite the decline in Hong Kong, and we confirm the outlook for the full year 2020 “.
To date, according to Burberry, the collections created by Riccardo Tisci represent 70% of the store offer. Moreover, the transformation of the distribution network involves the rationalization of the wholesale and the “refresh” of the boutiques of the main cities.
In the morning, the title of Burberry has also earned 7% on the London Stock Exchange.
The announcement of the partnership between the label and the giant Tencent (the developer of WeChat) for the development of social retail in China also contributed to the analysts’ optimism. The agreement will allow us to test the fusion between retail and social networks in the key luxury market.
The first step of this alliance will be the opening of a store powered by Tencent technology and able to offer “unique experiences that will connect consumers’ social and online activities with the physical reality in which they are located”.