Burberry Reports Strong Sales Growth Driven by Younger Consumers

Burberry has demonstrated a robust performance, with sales in China doubling over the Christmas period. This surge can be attributed to a marketing strategy that resonates particularly with Generation Z shoppers. The luxury fashion house has reported a three per cent increase in comparable store sales during the last quarter, exceeding analyst expectations.

Chief Executive Joshua Schulman highlighted the brand’s focus on British heritage and luxury as integral to its ongoing turnaround strategy. Notably, the campaigns featuring British celebrities such as Jennifer Saunders and Olivia Colman have successfully captivated younger shoppers across Greater China and the Asia Pacific region.

Sales in Greater China rose by six per cent, reflecting improved consumer confidence. Additionally, the Asia Pacific market saw an impressive five per cent increase, largely bolstered by strong local demand and spending from Chinese tourists in South Korea, where sales increased by thirteen per cent.

The Americas market also displayed resilience, achieving a two per cent growth after facing prior challenges. This growth has been attributed to an influx of tourists in New York City. However, sales in Europe, the Middle East, India, and Africa remained flat, as domestic shoppers attempted to compensate for declines in tourist spending.

Schulman expressed disappointment over the UK government’s failure to reinstate the VAT-free shopping scheme for tourists, which he believes has adversely impacted the luxury sector. He described it as a missed opportunity to engage international visitors who seek to purchase luxury items as souvenirs of their visit to the UK.

Looking ahead, Burberry anticipates that its full-year adjusted operating profit will align with market expectations, reaching approximately £149 million. This marks a significant recovery from £26 million in the previous year and £418 million two years prior. However, annual revenue forecasts suggest a decline to £2.4 billion from £2.97 billion in the previous fiscal year.

Despite challenges over recent years, including a 30 per cent decline in shares over five years, Burberry’s stock has shown signs of recovery, increasing by roughly 19 per cent in the past year. This turnaround is part of the “Burberry Forward” strategy, which has redirected attention to timeless British luxury and core products such as outerwear and scarves.

To further this vision, the company aims to establish 200 “scarf bars” by the end of the current fiscal year, reinforcing its commitment to its heritage and reinforcing the brand’s presence in the luxury market.