Burberry reports 19% profits fall
Tuesday November 17 2009
Luxury goods firm Burberry posted a 19% profits fall but said its performance was "solid", helped by strong demand for handbags and scarves.
Burberry said pre-tax profits were £78.4 million in the six months to September 30, down from £97 million last year as the effects of discounting hit margins and wholesale orders were reduced.
The firm - praised by commentators after the fashion house returned to the catwalk at London Fashion Week this autumn - said it had seen "exceptional growth" in London stores after the weak pound attracted foreign shoppers.
Burberry said it now planned to split its clothing brands into three distinct categories - casualwear will come under the label Burberry Brit, workwear and tailoring will be known as Burberry London and its catwalk collection will continue as Prorsum.
After shrugging off its links with "chav" culture in the UK in recent years, the brand has regained its upmarket reputation.
The firm, which was founded in 1856, opened a children's store in Notting Hill during the period.
It said its policy of focusing on its retail stores had started to pay off, with this now accounting for 54% of all sales.
The retailer said its non-clothing ranges represented its biggest growth area in the first half, contributing 34% of revenue.
The firm said larger handbags, "sling" shoulder bags and accessories like snoods and scarves had all proved increasingly popular as it looks to diversify its offering.
Shoes and childrenswear were also identified as key growth areas, anticipated to grow to make up 10% each of revenues in the medium term.
Press Association
