Burberry reports better-than-expected first quarter sales

  • Burberry reports better-than-expected first quarter sales

Burberry reports better-than-expected first quarter sales

Fashion retailer Burberry has dropped plans to restore a Grade I listed building which it meant to use for a new factory in Leeds.

The luxury fashion retailer said retail revenue in the three months to June 30 rose by 13% year-on-year to GBP478.0 million, boosted by favourable foreign exchange rates when overseas sales were translated back into the weak pound.

Burberry was on Wednesday on the front foot in preparing for a showdown with investors as new boss Marco Gobbetti unveiled better-than-expected sales growth in his City debut.

However, plans for a £50mln factory at a former flax mill in Leeds have been ditched, a year after it suspended the project in the wake of the Brexit vote.

The company added that mainline footfall remained challenging, offset by the increased customer conversion purchase rate, while further spending from top returning customers was also said to have driven growth.

The facility was due to open in 2019 and would have created 200 jobs but Burberry said today after the release of its trading update that it had relinquished its option on the building.

Burberry said overall growth was led by product innovation, with a strong performance from Burberry's Tropical Gabardine trench coat, the DK88 handbag, and leather goods.

One shareholder asked chairman Sir John Peace to explain the remuneration decisions for both chief financial officer Julie Brown and now-president and chief creative officer Chris Bailey, calling their pay "somewhat excessive".

The comparable sales for Q1 2018 at global luxury brand Burberry has increased by 4 per cent.

Having taken over as CEO from Christoper Bailey on the first of the month after a few months of transition, Gobbetti said: "I am delighted to have started as Burberry CEO. This is a time of great change for Burberry and the wider luxury industry".

"This is an encouraging performance from Burberry, which looks to be at long last pulling out of the doldrums". Excluding Beauty, underlying wholesale revenue in the first half of fiscal 2018 is still expected to be broadly unchanged year-on-year.

"Some of them are not upmarket enough for Burberry and are not where they want their brand to be seen, so they will stop selling to them on objective", he said.