LONDON, United Kingdom — Burberry Group Plc plans to buy back £150 million ($203 million) of shares as chief executive Marco Gobbetti seeks to enlist investor support for his plan to turn around the trench-coat maker.
The company on Wednesday reported full-year sales that trailed luxury rivals benefiting from a boom in Chinese spending. The London-based company is looking to join its peers with a revamped offer by new creative director Riccardo Tisci, who is set to show his first collection for the brand in September.
“While the task of transforming Burberry is still before us, the first steps we implemented to re-energize our brand are showing promising early signs,” Gobbetti said in the statement. The shares rose as much as 2.3 percent early Wednesday in London.
Luxury-goods makers LVMH and Kering both grew by double-digit percentages at the start of the year. But the rising tide hasn’t lifted all ships. After more than a year of rapid growth for the big luxury conglomerates, Burberry, along with brands like Salvatore Ferragamo and Tod’s, is still struggling to catch the wave.
Burberry’s sales rose 3 percent in the year ended March 31, the company said Wednesday. Burberry said performance was in line with guidance for the current fiscal year, and it said it was on track to deliver cost savings of 100 million pounds.
The shares have rallied 15 percent since Tisci’s appointment in late February, despite dropping 6 percent last week when it was disclosed that Belgian billionaire Albert Frere dumped his stake.
As the longtime designer of LVMH’s Givenchy, Tisci pioneered mixing high-end fashion with athletic-wear while also creating intricate red-carpet gowns favored by Beyonce and Kim Kardashian.
Chief executive Gobbetti is also planning to boost the brand’s high-end accessories business. This week the company announced it had acquired a leather-goods supplier in Italy for an undisclosed sum. The factory will create prototypes and coordinate accessory production with external suppliers, Burberry said.
By Robert Williams ; editors: Eric Pfanner and John J. Edwards III.