Burberry’s underlying sales were up 33% to £390m in the last three months of its financial year compared with a year earlier, driven by sales in the Asia Pacific region, particularly Hong Kong and Taiwan. The news sent Burberry shares up almost 8%.
It's another strong performance by the luxury fashion group. Analysts had been predicting a full-year profit of up to £290m ($178m) - but after fourth quarter revenues came in so far ahead of expectations (about £357m was the general consensus), they might want to nudge that up a bit. Looks like its rebranding, which has cast off its associations with council estates and propelled it back onto the pages of Esquire, Vogue and Tatler, is continuing to pay off.
Such a good news story is all-too rare in retail at the moment. Not surprising, then, that Burberry plans to build on it: it’s set for a 12%-13% increase in average retail selling space in the coming year, focusing on China, Latin America and the Middle East.
It’s refreshing to see that the UK’s strength in the creative industries hasn’t been dampened by the all-consuming talk of austerity. Elsewhere digital visual effects house The Mill has caught the eye of Barclays Private Equity. The latter has bought a majority stake from US private-equity house Carlyle Group, which values the company at £119m (and Carlyle has itself just bought a majority stake in The Foundry, another UK effects house whose software helped to create special effects in Avatar).
The Mill was formed in 1992 (with backing from U2 oddly enough), and provides digital effects for television and internet ad campaigns, including Nike’s ‘Write the Future’ and Lynx’s ‘Even Angels Will Fall’, plus 24 of the ads for this year’s Superbowl – as well as for TV shows like Doctor Who.
It’s a promising sector to be in. Major consumer brands are turning to software providers as a cheaper way of producing TV, internet and other moving image campaigns - and moving image ads on smartphones and in video games are expected to take off too. And Britain is pretty good at all the above - as the CBI points out today, our creative indusry accounts for a bigger share of GDP than that of any other country.
So maybe it’s true what they say about tough economic times: making money is just a matter of thinking creatively.