British luxury brand is hoping for a swift ‘rebound’ as restrictions ease
urberry has downplayed fears that the resurgence of Covid-19 in China will dent sales, standing by its forecasts despite recent lockdowns.
The British luxury fashion brand today reported a 23% rise in full year revenue to £2.83 billion, mainly driven by the post-pandemic sales in Europe and US. China dragged on performance as lockdowns were reintroduced, with sales down 13% in the fourth quarter.
Burberry admitted that its fortunes this year will be “dependent on the impact of COVID-19 and rate of recovery in consumer spending in Mainland China.”
Chief financial officer Julie Brown put on a brave face, saying: “We’re always prepared for an upside case and we’re always prepared for a rebound and, actually, in China we do find that recovery is very strong when it comes. “
China has faced rolling lockdowns in major cities like Shenzen and Shanghai in recent months as Beijing continues its “zero Covid” policy. The disruption has hit luxury stocks, as China is a major market for high-end goods.
“We are experiencing significant disruption at the moment and about 40% of our business is affected,” Brown said. “The good news is that if you look at what happened in the first wave [of the coronavirus pandemic] the recovery is very quick and very pronounced.”
Brown said China is an “amazing market” and Burberry “looked forward to reopening all the stores there.” The fashion retailer currently has around 5% of its stores closed in the Chinese market.
Despite the disruption, Burberry is still forecasting “high single-digit revenue growth” this year, maintaining prior forecasts.
Profit for the year just ended rose 4% to £511 million. Wednesday’s results are the first set of full year results under the stewardship of Jonathan Akeroyd, the former boss of Milan-based Gianni Versace who arrived as chief executive at Burberry last month. His appointment was announced in October last year.
Burberry shares dipped and then rallied in early trading. The stock is down 14% so far this year.
Credit: www.standard.co.uk /