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Burberry focuses on luxury

Burberry is investing heavily in transforming itself into a much more luxury-focused entity.

The transformation has seen the company putting a heavy focus on digital and introducing the B-Series limited-edition monthly drops sold on social platforms, while partnering with Instagram on the Checkout launch for in-app Instagram shopping. In the directly-operated physical space, it has been refreshing its stores and closing 38 smaller, non-strategic retail stores, a process that will continue this year. On the product front, a full-look merchandising initiative has driven improvements in cross-selling, benefiting tops, skirts and trousers. And customers have responded positively to new bags, although the overall category performance was impacted by softness in older lines.

During the year adjusted operating profit has fallen six per cent while actual operating profit has risen seven per cent. The gross margin fell 100 basis points, dented by currency exchange effects and growing investment in product. But the company was helped by cost savings. Wholesale was slightly ahead of expectations due to shipment timings and benefited in Asia Pacific with exceptional growth supported by strong Chinese spending in travel retail. Burberry continues to expect broadly stable revenue for the 2020 financial year. It was a year in which a lot happened as the firm reshaped itself into something more closely resembling the giants of European luxury goods rather than the Burberry of old.

 
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