Burberry proves luxury still popular

Luxury goods group Burberry yesterday revealed a bigger-than-expected surge in third-quarter sales as shoppers snapped up coats and leather goods such as handbags.

Chief executive Angela Ahrendts expects full-year profits will now be at the higher-end of analysts' forecasts of 250 million to 290m, up from the 215m surplus in 2009-10.

The company - famous for its red, black and camel tartan design - reported continued strength in the UK and rising demand from Chinese consumers, as group-wide sales for the three months to 31 December jumped by 27 per cent to 480m.

Wealthy tourists splashing out on luxury goods in London during the run up to Christmas boosted the 155-year-old firm's turnover, while its store expansion scheme continued, with branches opening in So Paulo in Brazil and Puebla in Mexico.

Kate Calvert, an analyst at Seymour Pierce, said: "With Burberry forecast to grow at twice the rate of its peers, we believe at least a 20 per cent premium is justifiable.

"Burberry not only has significant geographical, product mix and leverage opportunities but operates in a market with long-term growth credentials geared in to global growth."