Burberry benefits from tourist sales

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Tourists from continental Europe and China buying Burberry clothing and accessories helped the luxury goods company to navigate the downturn during the past three months. As was published in the Financia Times, Burberry said sales excluding currency movements fell 4 per cent in the three months to June 30, while they were up 8 per cent including the effect of exchange rate movements. However, retail sales were healthier, rising 12 per cent excluding currency movements.

Stacey Cartwright, finance director, said buyers from continental Europe and China, encouraged by the weak pound, were heading to Burberry’s British shops. “They are hunting out Burberry because of the brand momentum we have right now. We are hugely attractive from the point of view of the heritage and the iconic pieces we are offering,” she said.

However, US consumers were not flocking to Burberry in the same way, she said. “The issue for the US consumer is they are feeling the pinch a little bit more extensively in that market than perhaps across Europe and Asia. With the exchange rate back up at $1.65 it’s less attractive to them,” she said.

While consumers may be spending, department stores are reining in their purchases. Burberry said wholesale sales fell 28 per cent, in line with its own expectations of a 25 per cent decline. Some 15 percentage points reflected stores buying less stock, while 10 percentage points was from Burberry’s own initiatives, such as discontinuing the Thomas Burberry sportswear brand, sold mainly in Spain.


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