Burberry sets sights on Chinese wealth with expansion plan

Burberry, the quintessentially British clothing brand, is targeting the growing wealth in China with a plan to double the number of its stores across the country.

This came as the group unveiled a 17 per cent rise in first-half profits yesterday. Its chief executive Angela Ahrendts hailed Burberry's momentum, and said the full-year numbers would hit the top end of market expectations.

The brand, which is sported by celebrities such as Sarah Jessica Parker and Jessica Alba, announced that total revenues rose from £527m in the six months to the end of September 2009 to £641m a year later.

The biggest growth was in the Asia Pacific region. The group, which was founded by tailor's apprentice Thomas Burberry in 1856, is especially focused on China, where it bought out its local franchise partner at the beginning of last month. This will allow the group to take complete control of the 50 stores it has there, spread across 30 cities.

Stacey Cartwright, the chief financial officer, said: "We believe we can drive more productivity with those stores," adding Burberry was looking to double the number of shops in the country. She said the country would be a "double-digit growth driver".

Ms Ahrendts plans to increase group selling space by 25 per cent by the end of the financial year. About 15 per cent of that expansion is planned for China.

Underlying revenues at the company's stores rose 20 per cent from £294m in the six months to the end of September 2009 to £366m this year.

Its Aviator jackets, which cost about £2,000 each, proved particularly popular as did its series of shearling boots. The group also had success with its April Showers Capsule Collection, which included everything from trench coats and wellington boots to umbrellas and iPod cases.

Dennis Weber, an analyst at Evolution Securities, said the revenue statement outstripped his expectations, adding that Burberry had been the "best performing stock in the luxury space over the last two years".

Ms Cartwright said the luxury sector was be "holding up well" despite the recent squeeze on general consumer spending. Beyond Asia, Russia and the Middle East have seen soaring sales, as well as France and Italy.

Luxury China...

LVMH

The parent of Moët Hennessy and Louis Vuitton said in August it expected double-digit growth for its watch and jewellery operations in China. The group entered the country in 1992, and plans to expand to enter two new cities a year.

Alfred Dunhill

Like Burberry, another classic British clothing and accessories brand, which has been well received in China. It now owns 42 stores across 14 cities, with a further 48 franchise stores.

Ritz Carlton

The luxury hotel chain has been operating in China since 1998. It was, however, hit by the downturn as Chinese corporate clients were not enough to make up fall in overseas corporate travellers.

Financière Richemont

Cartier's parent has opened in Beijing and Shanghai, and believes China "will be tomorrow's market; our prime importance is therefore to make sure we are established in China today". The country made up 22 per cent of group sales in the year to 31 March.

News
people

Top Gear presenter is no stranger to foot-in-mouth controversy

Arts and Entertainment
Imelda Staunton as Dolores Umbridge in the Harry Potter films
books

New essay by JK Rowling went live on pottermore site this morning

Arts and Entertainment
Charlie Sheen said he would
tv

Charlie Sheen could be set to revive his role as a hedonistic womaniser

Life and Style
Jamie Oliver’s version of Jollof rice led thousands of people to post angry comments on his website
food + drink
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Trainee Recruitment Consultants

£20000 - £25000 per annum + OTE £35K: SThree: We consistently strive to be the...

Finance Assistant - Part time - 9 month FTC

£20000 - £23250 Per Annum pro rata: Clearwater People Solutions Ltd: Pro rata ...

Marketing Manager

£40 - 48k + Benefits: Guru Careers: We are seeking a Marketing Manager to join...

Market Risk Manager - Investment Banking - Mandarin Speaker

£45,000 - £65,000: Saxton Leigh: Our client is a well-known APAC Corporate and...

Day In a Page

The drugs revolution starts now as MPs agree its high time for change

The drugs revolution starts now as MPs agree its high time for change

Commons debate highlights growing cross-party consensus on softening UK drugs legislation, unchanged for 43 years
The camera is turned on tabloid editors in Richard Peppiatt's 'One Rogue Reporter'

Gotcha! The camera is turned on tabloid editors

Hugh Grant says Richard Peppiatt's 'One Rogue Reporter' documentary will highlight issues raised by Leveson
Fall of the Berlin Wall: It was thanks to Mikhail Gorbachev that this symbol of division fell

Fall of the Berlin Wall

It was thanks to Gorbachev that this symbol of division fell
Halloween 2014: What makes Ouija boards, demon dolls, and evil clowns so frightening?

What makes ouija boards and demon dolls scary?

Ouija boards, demon dolls, evil children and clowns are all classic tropes of horror, and this year’s Halloween releases feature them all. What makes them so frightening, decade after decade?
A safari in modern Britain: Rose Rouse reveals how her four-year tour of Harlesden taught her as much about the UK as it did about NW10

Rose Rouse's safari in modern Britain

Rouse decided to walk and talk with as many different people as possible in her neighbourhood of Harlesden and her experiences have been published in a new book
Welcome to my world of no smell and odd tastes: How a bike accident left one woman living with unwanted food mash-ups

'My world of no smell and odd tastes'

A head injury from a bicycle accident had the surprising effect of robbing Nell Frizzell of two of her senses

Matt Parker is proud of his square roots

The "stand-up mathematician" is using comedy nights to preach maths to big audiences
Paul Scholes column: Beating Manchester City is vital part of life at Manchester United. This is first major test for Luke Shaw, Angel Di Maria and Radamel Falcao – it’s not a game to lose

Paul Scholes column

Beating City is vital part of life at United. This is first major test for Shaw, Di Maria and Falcao – it’s not a game to lose
Frank Warren: Call me an old git, but I just can't see that there's a place for women’s boxing

Frank Warren column

Call me an old git, but I just can't see that there's a place for women’s boxing
Adrian Heath interview: Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room

Adrian Heath's American dream...

Former Everton striker prepares his Orlando City side for the MLS - and having Kaka in the dressing room
Simon Hart: Manchester City will rise again but they need to change their attitude

Manchester City will rise again but they need to change their attitude

Manuel Pellegrini’s side are too good to fail and derby allows them to start again, says Simon Hart
Isis in Syria: A general reveals the lack of communication with the US - and his country's awkward relationship with their allies-by-default

A Syrian general speaks

A senior officer of Bashar al-Assad’s regime talks to Robert Fisk about his army’s brutal struggle with Isis, in a dirty war whose challenges include widespread atrocities
‘A bit of a shock...’ Cambridge economist with Glasgow roots becomes Zambia’s acting President

‘A bit of a shock...’ Economist with Glasgow roots becomes Zambia’s acting President

Guy Scott's predecessor, Michael Sata, died in a London hospital this week after a lengthy illness
Fall of the Berlin Wall: History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War

Fall of the Berlin Wall

History catches up with Erich Honecker - the East German leader who praised the Iron Curtain and claimed it prevented a Third World War
How to turn your mobile phone into easy money

Turn your mobile phone into easy money

There are 90 million unused mobiles in the UK, which would be worth £7bn if we cashed them in, says David Crookes