The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
LONDON, United Kingdom — British trenchcoat maker Burberry Group Plc reported estimate-beating revenue as Asia Pacific returned to growth, the second positive sign in a week for Europe's struggling luxury-goods industry.
Third-quarter retail revenue rose 4 percent on a currency-neutral basis, the London-based company said Wednesday, compared with the median analyst estimate for a 3 percent gain. Bags were particularly strong after Burberry introduced products such as the Bridle model, which sells for up to £16,000 ($19,740).
The results will bolster optimism that the luxury business may have bottomed out after Cartier owner Richemont reported a return to growth last week. Burberry said its Asia Pacific division had a sales gain in the low single digits, marking a rebound for its largest unit which has been struggling for growth against a backdrop of weaker demand.
The stock rose 0.2 percent to 1,596 pence at 9:30 am in London.
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Highlights of the quarter included a record number of views of the company's Christmas ad and strong demand for new products, chief executive officer Christopher Bailey said in a statement. Bailey is due to hand over the reins to Marco Gobbetti in July and will return to steering Burberry's creative direction as part of a management re-shuffle that also includes a new finance chief, Julie Brown, who started on the job Wednesday.
Other third-quarter highlights included:
By Thomas Buckley; editors: Matthew Boyle and Paul Jarvis.
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A sharp drop in the label’s Asia-Pacific sales is the latest sign that Chinese luxury demand is cooling.
This week, Kering flagged sales were down 20 percent at its flagship brand, knocking confidence in the group’s turnaround strategy. ‘A more drastic solution is required,’ one analyst wrote.