Retail in Asia

Burberry APAC sales down 7 percent on Mainland China woes

Burberry Inc. announced on January 18 retail revenues for the third quarter ending December 31, 2022, rose 5 percent to GBP 756 million (USD 944 million), although it was flat at constant exchange rates.

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The London-based luxury brand said comparable store sales increased 1 percent overall, dented by Covid-19 restrictions in Mainland China. Excluding that key market, comparable store sales grew 11 percent.

Burberry Asia-Pacific sales fell 7 percent with Mainland China down 23 percent. Declines in Mainland China were partially offset by strong performances in South Korea up 10 percent, Japan up 28 percent and South Asia Pacific up 15 percent.

Elsewhere, the EMEIA region grew 19 percent, led by sales to tourists, while the Americas fell 1 percent; a slightly improved performance over the first two quarters.

By product, accessories grew double-digit comparable sales outside of Mainland China. Men’s accessories categories grew strong double-digit comparable sales with bags increasing over 25 percent, while outerwear saw high-single digit comparable growth outside of Mainland China.

During the quarter, Burberry opened 15 stores, including one in Pacific Place in Hong Kong.

“Overall, we are pleased with our performance in the third quarter as double-digit revenue growth outside of Mainland China offset the impact of Covid-19-related disruption there,” said Jonathan Akeroyd, chief executive officer, Burberry.

“Europe in particular continued to perform well, driven by strong trading over the festive period, and leather goods delivered another quarter of double-digit growth globally. We remain confident in our ability to reach our medium-term targets, despite the current macro-economic environment. We are focused on executing our plan to realise Burberry’s potential as the modern British luxury brand and we look forward to unveiling Daniel Lee’s debut collection for Burberry on our return to London Fashion Week next month.”

Looking ahead, Burberry said its near and medium-term targets remain unchanged as it continues to target high-single digit revenue growth with operating leverage ensuring good margin progression, “notwithstanding the current macro environment.”

Based on the effective foreign exchange rates as of December 30 2022, it expects a currency tailwind of GBP 60 million on revenue and GBP 70 million on adjusted operating profit in full-year 2023.