Burberry is keeping mum about Romeo Beckham's alleged £45,000 campaign fee as profits fall

Rumour has it the 12-year old made £45,000 for one day's work to film the Christmas advert

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Currency losses knocked fashion brand Burberry from its pedestal of profit growth. But it was Romeo Beckham, the son of David and Victoria Beckham, who received all the attention at the luxury giant’s earnings call. Here’s why:

What's going on with Romeo and why are Burberry investors upset?

He became the face of Burberry's Christmas campaign just before they announced a profit fall.

OK, but what's this got to do with Romeo?

Rumour has it the 12-year old made £45,000 for one day's work to film the advert. But Burberry's finance director Carol Fairweather and the Burberry team wouldn’t comment on his pay, and dodged questions from journalists when they reported the first half results.

How bad was it?

Burberry reported an 11 per cent drop in profits to £142m as currency woes hit its first half. Currency took £31m from its profit and £75m from sales.

But currency fluctuations have been a problem for all big companies recently right?

Exactly. The strong pound and euro against other global currencies has really hurt the bottom line of many global businesses.


So what can a company like Burberry do about it?

Well not much and that is why Burberry's chief creative and chief executive Christopher Bailey said the company will “continue to focus on the things we can control.” Plus it expects the currency issue to not continue to impact it in the second half.

So apart from the currency hit have their trench coats and bags been selling well?

Absolutely. Underlying profit – stripping out the currency fluctuations – rose 6 per cent to £152m – in line with the City's expectations and sales jumped 14 per cent to £1.1bn for the half year to the end of September.

Any other good news?

It raised its dividend by 10 per cent and said it will gradually increase its dividend pay-out ratio over the next three years, from 40 per cent to 50 per cent, as a “signal of confidence”.