Luxury goods company Burberry Group Plc has reported a 1.2 per cent drop in first-half sales, dragged down by a fall in wholesale revenue.

Burberry wholesale sales, which have been especially poor in the US, will continue to flag throughout the rest of the year, the company believes.

The fashion brand - which has suffered  some of its most troubling trading for 20 years - cited the 7 July terrorist attacks in London as a key reason for its slow sales, as much of its popularity lies in the UK's capital.

Burberry's first-half same-store sales grew 3 per cent, compared to a 14 per cent increase in the same period last year.

Same-store wholesale sales slipped 1 per cent in the first half, while total wholesale sales dropped 3 per cent.

Same-store retail sales rose 9 per cent - encouraged by new and refurbished stores - while license sales grew 3 per cent.

Burberry, which yesterday said Liz Claiborne executive vice president Angela Ahrendts will be replacing Rose Marie Bravo as chief executive next year, opened franchised stores in Istanbul, Sao Paolo, Warsaw, Jeddah and Riyadh during the first half of the year.

The company, which has suffered from image problems since its famous check clothing became equated with tackiness, is soon to be demerged from parent company GUS, which is in the midst of splitting itself up to boost shareholder value.