Shares in Burberry fell yesterday after the luxury goods retailer revealed sales growth from its key retail channel had stalled, hit by slowing demand in the UK, Spain and Japan.
Fewer post-Christmas markdowns, especially in the US and Hong Kong, has put the company's profits on track to beat expectations despite the slowdown in retail sales. Its shares slipped 5p to 399.75p.
Burberry is finding life tough in the UK, where its brand has become the badge for the "chav" subclass, which favours luxury brands that are easy to recognise. Stacey Cartright, the finance director, played down the "chav" impact.
"I suspect any effect has washed through by now," she said. The UK accounts for less than 10 per cent of total group sales.
Instead, she took encouragement from the soaraway success of its top-end label, Prorsum, which has catapulted Burberry's designer, Christopher Bailey, to near-superstar status in the fashion world. Ms Cartright said the group's core London collection - different takes on its classic trench-coats - would seek inspiration from Prorsum.
Total turnover in the six months to 31 March rose from £360m to £368m, putting the group on track to achieve underlying pre-tax profits of at least £162m. On a reported basis, retail sales rose just 1 per cent, while sales from its wholesale channel edged just 2 per cent higher.
Licensing revenue, which has been boosted by the success of its new Brit fragrances, rose 8 per cent.Reuse content