Conquering Asia might be the new conquering America for British retailers, but doing so carries risks: namely, that if sterling climbs to hitherto unheard-of highs, that's going to cost.
It turns out here can be such a thing as too successful: this morning Burberry, which has had stonking success in Asia, warned after its first quarter that unless something changes, the strength of the pound is likely to hit full-year profits to the tune of £55m, while adjusted operating margins will fall from 17.5% to about 16%. Not a disaster, by any stretch of the imagination - but not a lovely thing for new boss Christopher Bailey to have to report after his first full quarter as chief executive. Particularly not given the likelihood of a debacle over his pay at tomorrow's AGM.
Still, the company's first quarter results, posted this morning, showed retail sales rose 17% (calculated at constant exchange rates) to £370m in the three months to the end of June, compared with £339m this time last year.
'This first quarter performance reflects our focus on striving to give customers the best possible experience of the Burberry brand through ongoing investment in retail, digital and service, both on and offline,' trilled Bailey. Is there a special school chief execs attend where they learn to talk like that?
The company also reported that while online growth had been strong, offline traffic had been 'soft'. Although it's worth pointing out that Burberry places an emphasis on technology, to the point where its shop assistants are equipped with iPads so they can help you order off the website in-store if the shop doesn't have what you want in stock. So some of that online traffic may have come from stores anyway.
Sales growth in Asia and the Americas was in 'double digits', while in Europe it was more muted. Shareholders were clearly keen to give Bailey the benefit of the doubt, though: shares rose 3.7% in early trading. If that's not a vote of confidence, we don't know what is.