British label Burberry surpasses expectations
INTERNATIONAL - Strong demand for designer Riccardo Tisci’s new fashion ranges helped revenue at British label Burberry grow faster than expected in the first quarter, sending its shares soaring as a high stakes overhaul showed early signs of promise.
The luxury brand said sales to Chinese consumers in particular had picked up, boosted in part by younger shoppers’ response to its revamped, logo-strewn products. It had previously lagged rivals’ performance among this key clientele. Burberry shares were up 13.1percent at noon yesterday, on course for their best day in seven years.
Other luxury stocks also outperformed the pan-European STOXX 600, including Hermes, Louis Vuitton owner LVMH and Gucci parent Kering, which are due to report sales for the April-to-June period next week against the backdrop of enduring US-China trade tensions.
More than a year after chief executive Marco Gobbetti hit the reset button on Burberry in a bid to promote a more upmarket image, the plan faced its biggest test yet with new Tisci products accounting for half the wares on offer in its shops by the end of June. So far, his edgier twists on classic Burberry products like the trench coat, appear to have struck a chord.
Same store sales rose by 4percent in the period, topping market expectations of around 2percent after lacklustre growth of 1percent in the previous three months. “The consumer response was very promising, delivering strong growth in our new collections,” said Gobbetti.