Three great British brands, three very different sets of fortunes. Over the past six months, Burberry has seen its raincoats and leather goods fly off the hangers in the UK, US, France and China. The brand pulled in £1.02bn in second half revenue to the end of March, up 18% on the previous year.
Luxury brands aren’t the most likely firms to do well during a debt crisis, yet Burberry has not just survived, it has profited – even sales across the eurozone bloc are rising. And there is more growth to come: chief exec Angela Ahrendts plans to increase the brand’s selling space by 14% this year.
M&S, sitting as it does uncomfortably in the ‘squeezed middle’ has been less blessed. The company missed its forecasts for fourth quarter sales with like-for-like revenues down 0.7%. And it’s the fashion arm - the knickers and cardies business that historically did so well for the brand – that’s letting the side down. For while food sales are up 1%, general merchandise is down 2.8%. Of course, it hasn't helped that M&S ran out of stock in some of its best-selling lines of womenswear...
Unlike Burberry, the eurozone turmoil has damaged M&S’ revenues. As CEO Marc Bolland admits: ‘We continue to experience macro-economic pressure and restructuring in some parts of Europe.’ Ireland and Greece have been the toughest markets of late – although a new store in Paris has gone down a treat with the continental fashionistas. Looking further afield, however, opportunities abound for M&S: ‘Strategic international markets, including India and China, delivered double digit growth,’ says Bolland. And, despite the slight hiccup in revenue growth, the M&S boss remains confident that profit is still on target after a rigorous round of cost-cutting. Nevertheless, shares in the retailer fell 2.75% in morning trading.
And lastly, poor Aquascutum. Proving that not all luxury brands are equal, the fashion house has finally succumbed to the high street malaise. Founded in Regent Street in 1851 by entrepreneur John Emery after inventing the first batch of waterproof wool (hence Aquascutum – ‘water shield’ in Latin), the brand has had a troubled few years. News of a possible administration, which will put 250 jobs at risk, was broken by the FT late last night.
Aquascutum’s plight explains the rush sale of Jaeger, which owns the brand, earlier this week. Fashion entrepreneur Harold Tillman offloaded 90% of Jaeger to Jon Moulton’s Better Capital to protect it from the fall-out of Aquascutum.
Amid all this turmoil in the retail industry, it’s hard to imagine what the high street will look like in five years. MT has tried to peer ahead using its crystal ball, but all is confusion. But perhaps that’s because Mary Portas is dancing around like a dervish in there…