Burberry fashions sales rise but warns of falling tourist numbers causing it pain in the UK
- Burberry grew sales by 3% to £479m in the quarter to June 30
- It said weakness in the UK was offset by high tourist demand in Hong Kong
- Shares slid by nearly 5% on the news
- The fashion house is soon to unveil a new collection by Riccardo Tisci
Luxury fashion firm Burberry bagged a quarterly sales rise, but said it was feeling the pinch of falling tourist numbers in the UK and Europe.
It is the latest in a line of upmarket brands, including Mulberry, to blame a dip in tourism for sluggish UK sales.
Burberry said the weakness in its domestic market was offset, however, by rocketing demand from Chinese tourists in Hong Kong, Korea and Japan, which helped it to fashion a 3 per cent sales rise overall to £479m.
The Asia Pacific region also spearheaded Burberry’s digital growth – most of the fashion house’s online sales are now made using smartphones, it said.
A Burberry collection from day four of London Fashion Week. The style icon may go in a new direction following the appointment of former Givenchy designer Riccardo Tisci
Burberry, famed for its trench coats, is gearing up for the first collection from its new chief creative officer, former Givenchy designer Riccardo Tisci, who stepped into the shoes of creative force Christopher Bailey earlier this year.
Bailey is expected to part ways with the company at the end of 2018 after a 17-year tenure, with a bumper pay-off of around £13m.
Pieces from Tisci’s inaugural collection will be launched through ‘instant drops’ from September.
Burberry hopes to becomes as well known for bags as it is trench coats
The company is also collaborating with veteran British designer Vivienne Westwood, who is creating pieces for the brand that will be sold from December, and has partnered with luxury online marketplace Farfetch to boost its online presence.
Burberry said on Wednesday that this partnership was performing ahead of its expectations.
Boss Marco Gobbetti added: ‘While we know it will take time to achieve our ambitions, our progress to date and the energy in and around the company give me confidence for the future.’
In May, Burberry picked up an Italian luxury leather goods business as it tries to become as famous for handbags as it is for trench coats, and take the fight to the likes of Gucci, Louis Vuitton and Celine.
‘Strategies, such as taking the brand even more upmarket, have the potential to backfire and alienate traditional customers as we have seen with other brands in the industry,’ warned Helal Miah, investment research analyst at The Share Centre.
Burberry shares slid by almost 5 per cent in early trading to £20.03.