Top British fashion house Burberry plans to open about 20-25 mainline stores and close between 15-20 units in its current financial year – with the focus on flagship markets and duty free and travel retail.

 

There will be a strong concentration on China and the Middle East in particular. Burberry has already seen a good performance from its DF&TR business which has a number of standalone boutiques in airports worldwide.

 

In the six months to March, both the Americas region and DF&TR saw double-digit percentage underlying growth, with EMEIA up by mid-single digits. The wholesale division, in which DF&TR sits, produced revenue of £240m ($403m) excluding beauty, up +11% at constant exchange rates (+9% booked). This was ahead of guidance.

 

BEAUTY ON TRACK

Meanwhile, Burberry’s new in-house beauty division is starting to build revenue for the company. Beauty wholesale revenue in the second half was £93m ($156m), generating £144m ($242m) in the first year of direct operation, in line with guidance.

 

Sales were driven by the Brit Rhythm for Men and Women fragrance launches, which used digital marketing activities. The company says this had “a halo effect” across the brand.

 

Overall, across all divisions, Burberry’s sales in the six-month period reached £1,298m ($2,178m), up +19% underlying.

 

CEO, Angela Ahrendts (left), who joins Apple this summer, comments: “We are pleased with our second half performance, with total revenue up +19% and retail sales up +13%, underpinned by the planned increase in investment in offline and online retail, innovative customer service and marketing.

 

With the management transition well underway, Burberry begins a new year with beauty firmly established as the fifth product division and investment in flagship markets, such as Shanghai, further increasing the brand’s appeal to the core luxury customer at home and when travelling.”