According to the new CEO of the British fashion house, it will capitalise on its British roots to reach $5 billion.
Speaking on the sidelines of Burberry‘s earnings call, new CEO Jonathan Akeroyd said he wanted to capitalise on the brand’s Britishness to increase sales of higher-margin accessories such as handbags and shoes.
Jonathan Akeroyd, who joined the house in April, said Burberry was the only major luxury brand that could claim to be “British”. This, he said, would set it apart from its French and Italian rivals. He hopes that accessories, which currently account for 37% of sales, will rise to over half in the long term. And that’s under the leadership of new designer Daniel Lee, who has a “rare talent” for leather goods.
“One of Daniel’s unique talents is his product sensibility,” says Jonathan Akeroyd. “He has a strong track record of creating bestsellers, particularly in accessories.”
Burberry’s half-year results, released on Thursday, showed a recovery in Europe and an improvement in mainland China. Quarterly shop sales rose 11 percent, a jump from the previous quarter. They brought first-half revenue to $1.61 billion, up 5 percent in constant currency. Adjusted operating profit increased by 6% to $343 million.
Despite some closures due to health restrictions, the decline in sales in mainland China was very limited (-1%) in the second quarter after a 35% drop in the first quarter. In Europe, the brand achieved a 25% increase in sales in the second quarter, thanks to an increase in the number of tourists from the US, the Middle East and Asia. Foreign visitors to destinations such as Paris, London and Milan accounted for 40% of business.
The Americas remained a weak spot, with quarterly sales down 3% due to lower demand for entry-level items. In addition, Americans tend to spend more abroad than at home.
Burberry maintained its near-term guidance through the end of its 2024 fiscal year of single-digit sales growth and a margin of about 20%.
Read also> Daniel Lee replaces Riccardo Tisci at Burberry
Featured photo : © Burberry
