Burberry, the iconic British luxury brand, is entering a new phase under the leadership of CEO Jonathan Akeroyd and design supremo Daniel Lee. With a clear focus on growth and acceleration, Burberry plans to leverage its brand power and strengthen its British heritage and connection to design, craft, and culture. The company aims to maximize the potential of all product categories, with a particular emphasis on doubling sales of leather goods, shoes, and women’s ready-to-wear, as well as growing outerwear by 50% in the medium term. Accessories are also a key focus, with the ambition to make them account for more than 50% of group sales in the long term. Burberry plans to accelerate customer acquisition, enhance customer relationships, and drive loyalty and retention. The company also aims to convert all stores to its new concept by FY26 and increase sales densities by over 50%. Furthermore, Burberry intends to double its e-commerce revenue to reach around 15% of retail sales in the medium term.

This renewed emphasis on Britishness is noteworthy as previous creative heads and CEOs were Italian, making it more challenging to accentuate the brand’s British identity. However, under the new leadership, Burberry is placing a strong focus on British heritage and design to position itself as the modern British luxury brand.

In terms of financial performance, Burberry reported a revenue increase of 11% to £1.345 billion in the first half, with a 5% growth at constant exchange rates. Retail comparable sales rose by 5%, although it was lower compared to the previous year’s 37% growth, which was a bounce-back period after the pandemic. The second quarter showed particularly strong results, with a comp sales growth of 11%. Asia Pacific experienced an overall decline of 4% in comparable sales but showed an 11% growth in Q2, primarily driven by South Korea and Japan. Americas’ comparable sales fell by 3% across both quarters but remained higher than pre-pandemic levels. EMEIA demonstrated impressive growth, with comparable sales rising by 34%.

Wholesale revenue increased by 6% reported and 1% at constant exchange rates, with strong performance in the Americas and EMEIA, partially offset by disruptions in Russia and Asia travel retail due to lockdowns. Licensing revenue grew by 6% reported and 8% at constant exchange rates. Adjusted operating profit rose by 21% to £238 million, with an adjusted operating profit margin of 17.7%, up from 16.2%. The reported operating profit increased by 27% to £263 million.

Looking ahead, Burberry maintained its near-term guidance to FY24 while acknowledging the challenging macro environment and potential trading disruptions due to COVID-19 and economic risks in China, Europe, and the Americas. The company has also set a medium-term target to grow sales to £4 billion at constant exchange rates.

During the first half, Burberry made significant investments in its brand, including a successful campaign to support the expansion of its Lola handbag range. This led to above-average comparable store sales growth in leather goods. New product launches and seasonal collections also performed strongly, with 11% comp sales growth in leather goods in H1 and 15% in Q2. The Lola handbag emerged as Burberry’s bestseller, with the introduction of the Frances shape for AW22 contributing to its success. Outerwear comp sales grew by 3% in H1, although growth was impacted by lockdowns in China. However, overall outerwear saw an 18% growth, driven by strong performances in both men’s and women’s categories.

Store expansion and renovation were also prioritized by Burberry, with the opening or refurbishment of 22 stores in addition to the 47 stores from FY22. The company is on track to open or refurbish a total of 65 stores in the new concept this year.

As Burberry embarks on its next phase under new leadership and a renewed focus on Britishness, the brand aims to build on its legacy and unique heritage to achieve growth and realize its long-term ambition of reaching £5 billion in revenue. With its strategic plans in place, Burberry is positioning itself as a modern British luxury brand with a strong emphasis on its iconic British identity.

Useful links:
Burberry Official Website
Burberry’s Plan for Growth