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Burberry’s sales down by 45% in first quarter

Jul 17, 2020 United Kingdom
Burberry’s sales down by 45% in first quarter
Comparable sales of the Britain-based luxury brand declined by 45% in the first quarter, easing to -20% in June. Growth in Mainland China and Korea in June was ahead of pre Covid-19 levels, with sales of full-price leather goods up strongly in these regions
“In Q1, sales were severely impacted by the drop in luxury demand from COVID-19 and we expect it will take time to return to pre-crisis levels with the resumption of overseas travel. We are encouraged by the improving trends in all regions and the promising exit rate for June. We saw an excellent response to new product launches in recovering economies as well as online. Demand for leather goods was particularly strong in Mainland China and Korea, bringing new, younger luxury customers to the brand. As we enter the second phase of our strategy, we are sharpening our focus on product and making other organisational changes to increase our agility and generate structural savings that we will be able to reinvest into consumer-facing activities to further strengthen our luxury positioning”, commented Marco Gobbetti, Chief Executive Officer

Burberry has reported “progressive month on month improvement through the period as stores reopened”: comparable sales declined by 45% in quarter one, easing to -20%in June, while growth in Mainland China and Korea in June was ahead of pre COVID-19 levels, albeit with some benefit from the repatriation of sales given COVID-19 travel restrictions.

Asia Pacific declined by 10% in the quarter but returned to growth in June. Within this, Mainland China grew mid-teens in quarter one but grew ahead of the January pre COVID level of 30% in June. EMEIA declined by around 75%, impacted by lockdown measures and a significant reduction in travel. June sales improved but continued to be impacted by a significant headwind due to tourist flows. The Americas declined by 70%, impacted by lockdown measures. Burberry's said that "following the easing of restrictions, trends have improved significantly into June".


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