British luxury brand Burberry is continuing to riding high in China, with the country driving double-digit growth in Asia-Pacific even as companies from L’Oréal and Revlon to Mulberry continue to flounder in Asia.
The fashion house’s revenues rose 14% to £528m in the third quarter to December 31. Sales climbed 12% excluding the impact of five new stores, with outerwear, including the famous trenchcoat, and ‘large leather goods’ (MT can’t even begin to image what those are) contributing about half of the growth.
Burberry’s digital sales ‘outperformed’, as shoppers made more use of click-and-collect services. The brand is famous for mastering social media and cutting-edge technology way ahead of its fustier rivals.
Men’s accessories and tailoring also ‘grew strongly’, while regions outside Asia-Pacific delivered ‘mid to high single-digit comparable sales growth’.
Burberry’s success in China contrasts with handbag-maker Mulberry, who struggled to sell its pricey ‘Alexa’ satchels in Asia last year, and other western brands. Cosmetics giant L’Oréal announced last week that it was axing its Garnier range in China after sliding sales, hot on the heels of beauty group Revlon announcing that it was quitting the country altogether.
Chief exec Angela Ahrendts, who will swap macs for Macs later this year when she leaves Burberry for Apple, said the rise in sales was ‘in line with our expectations’. However, Ahrendts warned, ‘At current levels, exchange rates will be a significant headwind in the second half and beyond, and the macro environment remains uncertain.’ Except she won’t have to deal with that pretty soon.
Investors were happy with the news, sending the shares up over 5%. Incoming CEO and chief creative officer Christopher Bailey (who is also an avid dry stone walling fan) will be hoping that Burberry can maintain its ‘continuing strong brand momentum’ to keep shareholders sitting pretty, although even growth at this pace probably won’t deliver another 600% share rise in the next five years.