Festivalgoers help drive Burberry to best sales performance in 18 months
Sales of the luxury British brand fell 2% to £433m in the three months to the end of June, with a 1% decline at established stores, an improvement from the 6% fall in the previous quarter and the best performance since Christmas 2023.
Shares in Burberry rose more than 4% on Friday morning on the better-than-expected performance, as Joshua Schulman, who was appointed a year ago, attempts a turnaround.
Sales rose in Europe and the Americas but continued to fall in Asia, including its all-important Chinese market, which accounts for 30% of sales.
Schulman, the former boss of the US fashion brand Coach, said: 'Its a tough macro [environment] out there and we are taking things step by step but we are optimistic about the quarters ahead and the business in general.'
He said the company had appealed to 'elite VIP' customers with events linked to its partnership with King Charles's Highgrove estate and also to a younger luxury customer through festival-linked pop-ups featuring DJ sets located in shopping centres. A trial of dedicated 'scarf bars' within stores have also gone well and the company plans to install 200 in total.
'We are appealing to a much broader range of luxury consumers,' he said.
Adam Cochrane, an analyst at Deutsche, said further growth was largely dependent on Burberry's ability to 'replicate the success' of its core products in other areas.
The company said it was 'still in the early stages of our turnaround' with aims to continue simplifying the business and improving productivity and cashflow.
It expects to achieve £80m of its planned £100m cost cuts this financial year, with the remainder next year, and has already reorganised the business under four regional heads.
The company said in May it was cutting up to 1,700 jobs, including an entire shift at its Yorkshire raincoat factory, in an effort to make £60m in cost savings on top of a £40m savings programme announced in November.
Sign up to Business Today
Get set for the working day – we'll point you to all the business news and analysis you need every morning
after newsletter promotion
Schulman said Burberry's autumn ranges were being 'well received', although the external environment 'remains challenging. Over the past year, we have moved from stabilising the business to driving Burberry forward with confidence.
'The improvement in our first quarter comparable sales, strength in our core categories, and uptick in brand desirability gives us conviction in the path ahead,' he said.
He called on the UK government to implement policies that would 'encourage tourism' as he said: 'International consumers are not shopping in the UK to the extent we would like due to the lack of a VAT refund scheme.' The scheme was phased out under the last government.
'All luxury brands and all retail brands would benefit from that,' he said.
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Reuters
4 minutes ago
- Reuters
South Korea seeks mutually agreeable U.S. trade package
SEOUL, July 26 (Reuters) - South Korea will prepare a trade package that is mutually agreeable with the United States ahead of minister-level meetings planned next week and a U.S. tariff-pause deadline of August 1, the presidential office said on Saturday. The package will include shipbuilding cooperation, a sector of high interest to U.S. Commerce Secretary Howard Lutnick, who discussed the matter with South Korea's Industry Minister Kim Jung-kwan on Friday, it said in a statement. Friday's meeting was a follow-up to a meeting on Thursday, where Lutnick and Kim reaffirmed their commitment to reach a trade deal by August 1, after a joint meeting of finance ministers and top trade envoys that had been scheduled for Friday was postponed. South Korea, facing 25% tariffs, is rushing to reach a trade deal with Washington, with National Security Adviser Wi Sung-lac visiting the U.S. recently for high-level talks and Minister for Trade Yeo Han-koo also in the U.S. for negotiations, as pressure grows on officials to clinch a deal that is no worse than Japan's that cut tariffs to 15%. South Korea's trade negotiations with the U.S. have included non-tariff barriers in the agricultural and digital service sectors, but foreign exchange has not been part of trade talks beyond usual consultations, according to South Korean officials. U.S. President Donald Trump arrived in Scotland on Friday for bilateral talks with European Commission President Ursula von der Leyen on Sunday, which could yield a trade deal with the European Union, after making a deal earlier this week with Japan and the Philippines. Next week, U.S. officials will hold a new round of trade talks with China in Sweden for an extension to a separate deadline of August 12 set between the two countries. South Korea's Finance Minister Koo Yun-cheol and Foreign Minister Cho Hyun will also hold meetings with U.S. Treasury Secretary Scott Bessent and State Secretary Marco Rubio, respectively, next week.
Telegraph
34 minutes ago
- Telegraph
The alternatives to Amex that offer better rewards
American Express (Amex) is synonymous with credit card spending but it's also known for its deals that offer generous cashback, points-based rewards and exclusive perks including priority access to gigs, film screenings and theatre shows. But while these rewards can be appealing, Amex isn't always the best option. While acceptance has improved over the last few years, Amex cards are still not accepted by all retailers. If your aim is to earn reward points or cashback, this will be hindered if some of your favourite places to spend don't accept your card. There can also be incredibly high repayment rates and fees – with the Amex Platinum card charging 691.7pc APR variable, along with £650 a year in annual fees. This means there are more eligibility criteria to fulfil than with other credit cards. For example, you'll usually need a good or excellent credit rating, and some cards will also have a minimum income requirement – in the case of Amex Platinum, you must earn at least £35,000 and have 'no history of bad debt'. With that in mind, Telegraph Money looks at some of the best alternatives to Amex, depending on what you value most from your card – whether it's cashback, rewards, low-cost borrowing or fee-free spending abroad. Best for rewards Some Amex credit cards enable you to earn Avios points that can be redeemed on British Airways flights and holidays. Others let you earn reward points to be spent at certain retailers such as Amazon and Boots, while several Amex cards give you access to pre-sale tickets and exclusive benefits for gigs and theatre visits. Here are some popular alternatives to these cards, depending on what's most useful to you: Virgin Atlantic Reward credit card: flight rewards The Virgin Atlantic Reward credit card gives you 0.75 Virgin Points for every £1 spent on everyday purchases and 1.5 Virgin Points for every £1 spent with Virgin Atlantic or Virgin Holidays. What's more, if you spend on your card within the first 90 days, you'll earn 3,000 bonus points. Points can be redeemed on Virgin Atlantic Flights, hotels and travel extras such as airport parking. The card has a representative APR of 26.9pc (variable). Alternatively, you can pay £160 a year to upgrade to the Reward+ version of the card and earn 18,000 bonus points when you make your first purchase in the first 90 days. You also earn 1.5 Virgin Points for every £1 spent on everyday purchases and three Points for every £1 spent with Virgin Atlantic or Virgin Holidays. Head for Points, a consumer website that pits the top credit cards against each other, notes this is 'exceptionally good'. According to the provider's website, Virgin Points 'never expire'. At the time of writing, you'd need to have earned 20,000 of them to buy a return economy flight from London Heathrow to New York's JFK airport in off-peak September. Barclaycard Avios credit card: flight rewards and exclusive events You can collect 1 Avios for every £1 spent on eligible purchases with the Barclaycard Avios card, plus 5,000 bonus Avios if you spend £1,000 in the first three months. There's a representative APR of 29.9pc. Alternatively, upgrade to the Plus version of the card for £20 a month and earn 1.5 Avios for every £1 spent, plus 25,000 Avios if you spend £3,000 in the first three months. You also benefit from discounted airport lounge access. However, the representative APR jumps to 80.1pc APR for this option. According to Barclaycard, you can get a peak economy return flight from London to Milan for 19,500 Avios plus £1. In addition, becoming a Barclaycard customer gives you the opportunity to take advantage of entertainment perks, including exclusive tickets to live performances and events.
Reuters
34 minutes ago
- Reuters
Kotak Mahindra Bank's Q1 profits drop more than expected on higher provisions
MUMBAI, July 26 (Reuters) - Kotak Mahindra Bank ( opens new tab, India's third-largest private lender by market capitalisation, reported a drop in first-quarter profit on Saturday, as it set aside more funds for potential bad loans and saw a contraction in lending margins. The bank's standalone net profit fell 47.5% to 32.81 billion indian rupees ($379.42 million) for the quarter ended June 30, down from year-earlier 62.5 billion rupees ($722.75 million), which included a 27.3 billion rupee gain on a stake sale of its insurance subsidiary to Zurich Insurance (ZURN.S), opens new tab last year. On average, analysts had expected a profit of 35.82 billion rupees, according to data compiled by LSEG. The lender's net interest margin, a key gauge of profitability, fell to 4.65%, from 5.02% a year earlier, reflecting the impact of the Reserve Bank of India's recent interest rate cuts. When rates are lowered, banks typically pass on the benefits to borrowers first and only later reduce deposit rates, which can temporarily squeeze margins. Meanwhile, Kotak Mahindra Bank's asset quality deteriorated, with the gross non-performing assets ratio at 1.48% at the end of June, versus 1.39% a year earlier. Indian lenders have kept a tight lid on unsecured lending after grappling with higher bad loans in that segment, a move that has helped support asset quality. The bank's provisions for bad loans more than doubled year-on-year to 12.08 billion rupees. Net interest income grew 6% to 72.59 billion rupees in the first quarter. While credit growth has slowed across the industry, Kotak Mahindra Bank's loan book expanded 13%, driven mainly by a 16% rise in loans to retail consumers. ($1 = 86.4750 Indian rupees)
