Burberry has reported that its turnaround strategy is delivering results, with retail revenues rising by 5% to £455 million in the 13 weeks to June 27, compared to the same period last year. The London-listed luxury fashion brand credited growth in North America and China, while noting that spending in Europe has been pressured by the ongoing conflict in the Middle East.
Strong Performance in Key Markets
The company's Americas business saw a 12% increase in sales, while greater China experienced a 9% rise, driven by local shoppers and strong demand from Gen Z customers. In South Korea, sales grew by 11%, supported by both local and tourist spending, but this was partially offset by a 2% decline in Japan.
European Sales Decline Amid Geopolitical Tensions
In the Europe, Middle East, and Africa region, Burberry reported a 3% drop in sales, highlighting the drag from the Iran war and weaker tourist spending. Despite this, the overall performance was buoyed by a 1% positive impact from currency exchange rates.
Focus on British Heritage and Pricing Strategy
Under the Burberry Forward turnaround strategy launched in late 2024, the brand has refocused on its British heritage and adjusted its pricing strategy, moving away from some ultra-luxury lines. CEO Joshua Schulman expressed satisfaction with the progress, noting that the company is attracting a broad range of luxury customers.
Strong Demand for Outerwear
Burberry highlighted strong demand for raincoats, jackets, and scarves, with outerwear sales up by double digits. For the first time in three years, the company saw growth across all divisions: womenswear, menswear, accessories, and childrenswear, anchored by the outperformance of outerwear.
Mr. Schulman stated: "Our strategy is working. We are attracting a broad range of luxury customers across product categories, channels and geographies, reinforcing my confidence in the opportunities ahead."
