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Burberry’s return to Britishness wins in China with sales up almost 50%

July 19, 2023
in Entertainment
Burberry’s return to Britishness wins in China with sales up almost 50%
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What Happened: Chinese demand for trench coats and leather goods boosted Burberry’s first-quarter results. Sales in mainland China, the British luxury brand’s biggest market, increased 46 percent year over year in the three months to July 1.

Chinese tourists are splurging at home and around Asia as borders have reopened for travel, buoying much of the Asia-Pacific region. This contributed to total retail revenue of £589 million ($770 million) during the 13-week period, up 17 percent on a reported basis and 19 percent on a currency neutral basis.

“We’ve seen the Chinese recover their appetite for tourism, especially in southeast Asia and Japan,” said interim finance chief Ian Brimicombe. “Hong Kong and Macau are also proving popular with Chinese tourists now that Covid-19 lockdown restrictions have been lifted.”

While Asia was a boon, the Americas were a bust. Quarterly sales in the region were down 8 percent year over year, after falling 7 percent in the previous quarter.

“I think [demand from] the aspirational shopper has weakened a little … but we’re picking up in the higher-net-worth individual cohort, and they’re buying higher-priced products in leather goods and outerwear,” Brimicombe told reporters.

The Jing Take: In the past few months, Capri Holdings, Nike, Kering, and Tapestry have all reported slowing or declining sales in North America. With the cost of living still high despite an easing inflation rate, many entry-level luxury shoppers are choosing not to splurge.

That said, high-net-worth consumers in the US, who are less affected by macroeconomic challenges, are still purchasing big-ticket items.

Burberry said that among the categories that performed well, outerwear comparable store sales were up 36 percent in the quarter, led by heritage rainwear. Meanwhile, comparable store sales of leather goods rose 13 percent, driven by strong performance from women’s bags, especially the Frances shapes and vintage Burberry Check lines.

The brand’s refocus on its Britishness, which began earlier this year under its new chief creative officer Daniel Lee, is starting to pay off. In addition to classic items, its new visual expression centered around heritage is resonating with younger consumers. A TikTok featuring Burberry’s new blue rose print (and a cute cat) achieved 20.8 million views, while a stop motion animation video highlighting its check pattern generated over 19 million views and 720,000 likes.

@burberry Choupette? #MetGala #Burberry ♬ original sound – Burberry

Although Burberry struggled in China following a backlash relating to the Xinjiang cotton crisis in 2021, recent results prove that it has turned its image around there, too. The 167-year-old house has stayed relatively under the radar in terms of local activations and announcements — besides appointing its first Chinese global ambassador in April this year and participating in the 618 festival last month. Its new campaign imagery has elicited largely positive responses from Chinese shoppers.

Under a Weibo post of its new Winter 2023 campaign, which highlights “the best of Great Britain,” Chinese netizens praised Lee’s creative direction.

Burberry’s Winter 2023 campaign was shot at the Isle of Skye in Scotland and Northern Ireland’s Giant’s Causeway. Photo: Burberry

“Daniel is really good at choosing shooting locations! The combination of the Isle of Skye and Burberry is really amazing,” wrote one user. Another penned, “The color selection for autumn and winter is really special.”

Clearly, the return to classics is working. And with China back on board, the luxury player should be on track to reach its goal of doubling sales of leather goods, shoes, and women’s ready-to-wear and hitting a medium-term growth target of £4 billion ($5.2 billion) in annual revenue.

The Jing Take reports on a piece of the leading news and presents our editorial team’s analysis of the key implications for the luxury industry. In the recurring column, we analyze everything from product drops and mergers to heated debate sprouting on Chinese social media.

>>> Read full article>>>
Copyright for syndicated content belongs to the linked Source : JingDaily – https://jingdaily.com/burberry-q1-2024-results-china-daniel-lee/

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