Burberry receives boost from falling pound due to Brexit

Brexit has hit the pound which has helped Burberry Picture: Jonathan Brady/PA Wire

Brexit has hit the pound which has helped Burberry Picture: Jonathan Brady/PA Wire

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Luxury fashion house Burberry has cheered ongoing “exceptional” trading in the UK as it continues to receive a boost from the Brexit-hit pound.

The group, famous for its trench coats and check scarves, saw global comparable store sales lift 2 per cent in its final quarter to March 31, while total retail revenues over the second half jumped 19 per cent to £1.3 billion thanks to the weakness of sterling since the Brexit vote.

The UK was once again its star performer for sales thanks to booming tourist trade as shoppers from the US and Asia have flocked to Britain to take advantage of the plunging pound to snap up luxury goods at a knock-down price.

It said a “continued exceptional” showing from the UK led double-digit sales growth across the Europe, Middle East, India and Africa region, adding that it saw strong demand from both tourists and domestic customers.

A robust quarter in China, where sales rose by a “high single digit percentage”, also helped offset a tougher quarter in Hong Kong and the United States, where sales slid.

The fourth quarter comparable sales rise marks a slight slowdown on the 3 per cent reported in the previous three months, but left overall growth at 3 per cent in the final six months of its year.

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Burberry said its second-half sales were buoyed by a strong customer response to its February runway collection and demand for leather goods.

Burberry said double-digit sales growth of leather goods drove an impressive six months for accessories.

Despite the retail sales surge, total revenues fell 1 per cent with the fillip from the weak pound stripped out as it suffered from sliding US sales and its move to destock its beauty range as part of a new partnership with make-up brand Coty.

Shares fell 4% after the update.

But the group said the pound’s plunge was now set to flatter underlying retail and wholesale profit by around £130 million, up from the £120m pencilled in earlier this year.

Christopher Bailey, chief creative and executive officer, said: “In an uncertain environment, we continue to take action to strengthen the brand and reposition Burberry for growth.

“The outperformance of fashion and the strong customer response to new products underline our renewed creative momentum.”

The group’s second half sales rise marks a welcome recovery under a turnaround plan that has included simplifying the product line, revamping its digital store and cutting costs.

Mr Bailey is also stepping down from the role of chief executive, to become president and chief creative officer as part of the overhaul.

His successor, Marco Gobbetti, joined the company on January 27, initially holding the role of executive until becoming chief executive in July.

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