Stripping out this payment, however, and a smattering of other one-off costs, profits actually rose by 6% to £173m, which was better than expected. Sales are up, driven by a 40% increase in sales of men’s accessories (everyone loves a Burberry manbag) to top £883m for the first six months to 30 September. That’s up 8% on the same period last year.
While bringing fragrance and beauty in house has ripped a hole in first-half profits, they should ensure a lucrative new revenue stream in 2013. From April, Burberry will control the global sourcing, logistics and distribution of the products. ‘Integrating fragrance and beauty is a significant brand and business opportunity,’ says Ahrendts. ‘Burberry has been diversifying its product range away from outerwear and has opened new stores in Hong Kong, Milan, Rome and London.’
Shares in Burberry rose 1% to £12.65 in early morning trading but that will be cold comfort to Ahrendts – Burberry’s share price plunged 20% after the profit warning. So far this year, the value of the company has dropped by 7%.