New creative director already making a difference says analyst after stable sales reported.
The high-profile appointment of Burberry’s new creative director Ricardo Tisci appears to be paying off after the company reported comparable revenue up by 2.3 per cent for the last financial year.
That figure excludes a decline in the wholesale beauty business which transferred to a licensing model last year with the inclusive sales figure down 1 per cent. Total sales were £2.72 billion.
“The buzz surrounding Ricardo’s appointment has paid off,” observed Chloe Collins, senior retail analyst at GlobalData.
“With his first collections, which started dropping into stores in February, receiving widespread praise and achieving double-digit percentage growth on the year, it has given the brand a much-needed refresh as it ran the risk of becoming outdated and repetitive,” she said.
“His dark grungy styles previously seen at Givenchy have provided a welcome update to Burberry’s classic tailoring and neutral tones, with the brand also given a new modernised monogram logo, however it must be careful to not lose the traditional British heritage it is famous for.”
In Asia, the Americas, Europe, the Middle East and Africa, sales rose in the low single digits, making the company’s UK home market the star performer in the mid-single digit percentage range, largely due to increased tourist spending.
Burberry CEO Marco Gobbetti said sales would have been higher had the company had more product in stores at the end of the financial year.
“We need to get the products in the stores to start to see the reaction of customers,” he said.
In the year ahead, the company plans to refurbish about 80 of its flagship stores and close about 38 smaller boutiques in secondary locations.
The company reported a 6 per cent decline in operating profit to £438 million pounds, largely caused by foreign exchange movements and investment in new products.
Meanwhile, the brand’s digital offer has improved through increased reach through social media, and greater use of influencers among other factors, said Collins.
“Burberry must continue to invest in technology and marketing to build its online sales further, and find a way to import these innovations into its store portfolio,” she said.
This story first appeared on sister site Inside Retail Asia.