Blog: Leonie BarrieBurberry in check

Leonie Barrie | 16 January 2008

Despite reporting its fifth consecutive quarter of double-digit growth yesterday, with third-quarter sales up 26%, shares at luxury goods group Burberry still slumped 16%.

Investors were spooked that like-for-like sales growth was down to 6% – nearly half the rate posted in the first half of the year – and that retail sales, already “modestly behind plan”, were boosted by discounting. To cap it all, the company hinted that earnings guidance is likely to come in at the lower end of forecasts.

The global fashion house said its problems were partly due to glitches in its retail IT system, which left some stores short of stock, and that it had achieved a “good showing in a tough retail environment”.

But Burberry would be unwise to think itself insulated from the worst effects of the global credit crunch just because of its wealthy customer base.

While it’s true that it may only have limited exposure to the beleaguered UK high street, analysts are particularly uneasy about Burberry's exposure to the US, where it generates a third of its revenue.

In the US, the housing slump is likely to turn luxury consumers off indulgent buys – particularly given that the sector is increasingly reliant on aspirational customers who will have no alternative but to cut costs. 

UK: Burberry ups H2 revenue forecast as Q3 sales soar


BLOG

US border tax a contentious issue

Fresh from their disappointment at seeing the Trans-Pacific Partnership (TPP) free trade deal abandoned last month with an executive order by President Donald Trump, the US apparel and footwear sector...

BLOG

Primark's sustainable cotton programme takes shape

With the ultimate aim of ensuring all the cotton in its products is sourced sustainably, value clothing retailer Primark is adamant that having a business model focused on offering the lowest prices o...

BLOG

Trump administration starts to shake up trade

Last week we marked the inauguration of Donald Trump as the 45th president of the United States by taking a closer look at what's at stake for the textile and apparel trade – especially his promises t...

BLOG

Likely shifts in the sourcing landscape in 2017

Continuing our look at what lies ahead for the apparel industry and its supply chain in 2017, the panel of industry experts consulted by just-style last week tackled likely shifts in the sourcing land...

just-style homepage



Forgot your password?