Classic style: Burberry’s tropical gabardine trench coat is proving popular in China
A passion for British labels among wealthy Chinese consumers has kick-started Burberry’s transformation plans.
Demand for the luxury label’s famous checked trench coats helped push up its wholesale business in Asia Pacific by 5 per cent last year, outstripping the US, Middle East, Europe and UK.
Burberry chief operating and financial officer Julie Brown said that it has seen a ‘resurgence’ of shoppers in Hong Kong, with both Chinese tourists and local customers pushing up sales growth to double digits.
She added: ‘The Chinese make up around 40pc of our business, so they just love the Burberry product. It’s as simple as that.’
Burberry’s tropical gabardine trench coat – a lightweight version of the traditional jacket that costs up to £2,000 – was one of the company’s biggest hits.
Its Camden Car Coat, which sells for £1,300, has also proved popular with male customers.
Though group revenue dipped 1 per cent to £2.7billion in the year to March 31, profits came in ahead of expectations, up 3 per cent to £471million. Store sales rose 3 per cent.
It also accelerated closures, shutting 34 sites and opening 14 in countries including China, Taiwan, Australia and the United States.
Burberry is at the beginning of a three-year strategy introduced by chief executive Marco Gobbetti to revitalise the firm and take it more upmarket.
It wants to attract younger customers and become a major competitor in the high-end handbag market, competing with Celine and Louis Vuitton.
The company recently appointed former Givenchy head designer Riccardo Tisci to replace Christopher Bailey, who is leaving after 17 years.
Tisci will debut his first collection at London Fashion Week in September.
Gobbetti said his decision to take Burberry more upmarket did not mean it was pushing up prices or going ‘uber-luxury’. ‘We are luxury, no question about that,’ he said.
‘We are very much defined by our trench coats, which sell for between £1,300 and £2,000, and even our soft accessories, like our cashmere scarves, sell for about £400. We’re clearly not entry or middle market.
‘At the same time we’re not interested in playing in the same space as Chanel or Hermes.’
Analysts have been critical of Gobetti’s plans so far, but the launch of a £150million share buyback programme yesterday has won praise.
Shares in Burberry closed 3.6 per cent higher last night.
100 Years Of Luxury
- Burberry was founded in 1856 in Basingstoke by 21-year-old Thomas Burberry
- Its famous trench coats were originally for army and navy officers and are still made at its factory in Castleford, Yorkshire
- It reported revenues of £2.7billion last year
- Customers spent £117million on children’s clothes
- The company has 449 stores worldwide