Burton recovery shapes up with 31% growth

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The Independent Online
The recovery of the Burton retail group continued yesterday when the company reported a 31 per cent increase in profits driven by improved performances from its chains stores such as Top Shop, Burton Menswear and Dorothy Perkins.

However, John Hoerner, chief executive, played down speculation that the group might bid for Austin Reed, the upmarket retailer whose share price has been rising sharply recently on rumoured interest from Burton, Moss Bros and Next. "I don't know where that rumour started," he said.

Mr Hoerner also said that, though Burton had notched up strong increases in sales and profits, a recovery in the clothing retailing sector seemed to be lagging other parts of the high street.

"It's very difficult to find any evidence that our sector is going full steam ahead. Our view is that our particular sector is not keeping up with the rest."

Mr Hoerner said he planned to grow the group by adding more stores to the Debenhams portfolio - a further four will open in the next two years, increasing the total floor space by 20 per cent by the year 2000.

Evans and Principles are also likely to be expanded. The new childrenswear label Principles for Kids has performed well and has been added to 70 outlets.

Excluding exceptional items Burton's pre-tax profits increased by 31 per cent to pounds 88m in the six months to March. Like-for-like sales increased by 5.7 per cent over the six months. Comparative sales have risen a further 5.6 per cent since the year-end.

The margin also improved by 1.8 percentage points during the period as the company continued to sell at full prices for more weeks of the years.

Burton is also reaping the benefits of better buying, an improved supply chain and a re-shaping of its store portfolio.

Debenhams' profits rose 13 per cent to pounds 58m. But the best improvements were among multiples. Dorothy Perkins made pounds 7m compared with just pounds 700,000 last time, helped by better buying.

Profits at Top Shop doubled thanks to less discounting.

The shares fell 6.5p to 152.5p.