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.
Burberry Group Plc shares fell 6 percent after a slow down in the Americas overshadowed a rebound in China as the country reopened after the pandemic.
Retail comparable store sales rose 7 percent in the year to April 1, which was ahead of expected growth of 5.6 percent. However, the British brand’s revenue in the Americas continued to deteriorate with comparable sales dropping 7 percent in the final quarter.
Jonathan Akeroyd took over the running of the trench-coat maker more than a year ago promising to revive excitement in the brand. He has since named a new designer, Daniel Lee, whose debut collection in February sought to reassert the “Britishness” of Burberry.
The label was previously led by an Italian duo whose plan was to elevate the prestigiousness of Burberry in the eyes of consumers. While Akeroyd has said he will continue on this path, he also wants to boost revenue by selling more accessories and bags in the long-term.
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Revenue accelerated in the last quarter as growth rebounded in China to 13 percent, according to a statement Thursday. But trends in the Americas worsened which Burberry blamed on the fact Americans are now traveling abroad again reducing local spending. Customers in the region are also buying fewer entry-level products, the company said.
Burberry kept its guidance for its medium-term targets, however, adding it’s mindful of the macroeconomic and geopolitical environment.
Luca Solca, analyst at Sanford C. Bernstein said Burberry is one or two steps behind on everything, with a faster decline in the USA, he added and more muted profit.
More visibility is needed on the impact of Lee, according to Morgan Stanley analyst Edouard Aubin who said the slight beat on sales was expected.
Burberry’s performance follows a mixed picture for luxury rivals in the first quarter of this year. Christian Dior owner LVMH Moet Hennessy Louis Vuitton SE, Hermès International and Prada SpA powered ahead while Gucci parent company Kering SA struggled.
By Angelina Rascouet.
This week, more luxury brands will report first-quarter results, offering clues as to how broad and how deep the downturn is going to get.
Fashion brands are edging in on the world’s largest gathering of design professionals and their wealthy clients, but design companies still dominate the sector, which is ripe for further consolidation, reports Imran Amed.
Blocking the deal would set a new precedent for fashion M&A in the US and leave Capri Holdings in a precarious position as it attempts to turn around its Michael Kors brand.
After preserving his fashion empire’s independence for decades, the 89 year-old designer is taking a more open stance to M&A.