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Burberry sales decline
Burberry’s sales fell 4% at constant currencies in the first quarter, with performance varying a great deal between retail and wholesale and between countries.
The strongest drop was in wholesale sales with sales (at constant currencies — as are all references here) down 28%. High margin licensing revenues also fell, but only by 3%, which is tolerable in a recession, but it is expected to become much worse with Burberry expecting a 10%-15% decline for the full year. Retail sales were surprisingly strong, up 12%.
The growth in retail came from Korea and the UK. Does the latter indicate that it is making progress countering its chav image? It sounds unlikely, and, as I repeatedly warned about FCUK (and as eventually proven right), this brand is unlikely to sustain its strength in the long term, despite its strength in the US and Asia.
Like-for-like sales are flat, but that is actually a good performance for a company that has never produced good like-for-like growth, relying, instead, on expansion. The biggest worry for the moment is probably the weak performance in the US, with sales in the Americas down 14%.
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