Burberry to expand to cash in on luxury boom

Burberry is to ramp up its expenditure on stores in London, flagship cities globally and in emerging markets after it delivered a 40 per cent surge in full-year profits.

Stunning growth in Asia helped the fashion brand to post a 27 per cent leap in revenues to £1.5bn over the year to 31 March, as CEO Angela Ahrendts said the luxury sector remained "very strong worldwide" and was forecast to see double-digit growth in the next few years.

Perhaps more eye-catching was Burberry's plans nearly to double its capital expenditure this financial year to £180m to £200m, compared with £108m the year before.

The bulk of this money will be spent on opening new and refurbishing existing stores worldwide, including doubling its space in London and spending £20m in the capital.

In addition to opening its Burberry Brit store in London's Covent Garden this month, the luxury brand plans to open a huge flagship store on the capital's Regent Street by knocking through the walls of the Habitat and LK Bennett shops it has acquired. The group currently has seven Burberry Brit stores globally, which emphasises its 155-year-old British heritage and displays its more casual fashion labels.

With tourists from Asia, the Middle East and Russia boosting trade in London, Ms Ahrendts said: "London is not only our home market but consistently one of our top markets."

In the year ahead, Burberry plans to increase its average retail selling space by an average of 12 to 13 per cent. This will include up to 25 new stores, with a bias towards openings in China, Latin America and the Middle East.

However, a key focus of its store strategy will be in flagship markets, including London, Paris, Milan, Chicago, San Francisco, New York, Shanghai, Sao Paulo and Hong Kong.

Ms Ahrendts said: "The flagship markets have been so much more resilient than the second-tier markets."

For the year to 31 March, Burberry's adjusted pre-tax profits jumped by 39 per cent to £298m. Under the leadership of Ms Ahrendts – who took the helm in July 2006 after leaving the US retailer Liz Claiborne – Burberry has transformed its fortunes by reinvigorating its fashion credentials, overhauling its supply chain and systems, and putting in place a more efficient corporate structure.

The group, which has 174 mainline stores and 199 concessions globally, has also continued to buy out franchise partners, such as its £70m acquisition in China in September that has delivered a sharp improvement in its performance in the country.

Burberry, which is famous for its trench coats and its check pattern, boasted net cash of £298m on its balance sheet and lifted its full-year dividend by 43 per cent to 40p.

The group also delivered a record operating margin of 15.6 per cent. However, given its hefty investment programme in stores, Burberry expects to post only a "modest improvement" in its operating margin this financial year.

Of Burberry's global regions, Asia-Pacific grew the fastest, delivering retail and wholesale revenues up by 53 per cent to £457m, while Europe was a comparative laggard after posting revenues up by 15 per cent to £474.6m.

Non-apparel, notably handbags, jewellery and shoes, was Burberry's star-performing category, with revenues up by 32 per cent to £563.3m.

Eku Kobayashi, an economist at H2O Markets, said: "It is the exposure to emerging markets rather than recession-hit Western nations that has driven [Burberry's] profitability at a difficult period in the economic cycle."

FootballGerman sparks three goals in four minutes at favourite No 10 role
Rumer was diagnosed with bipolarity, attention deficit hyperactivity disorder and post-traumatic stress disorder: 'I was convinced it was a misdiagnosis'
peopleHer debut album caused her post-traumatic stress - how will she cope as she releases her third record?
A long jumper competes in the 80-to-84-year-old age division at the 2007 World Masters Championships
Radamel Falcao was forced to withdraw from the World Cup after undergoing surgery
premier leagueExclusive: Reds have agreement with Monaco
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Life and Style
Walking tall: unlike some, Donatella Versace showed a strong and vibrant collection
fashionAlexander Fury on the staid Italian clothing industry
Arts and Entertainment
Gregory Porter learnt about his father’s voice at his funeral
ebooksAn unforgettable anthology of contemporary reportage
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
Life and Style
Children at the Leytonstone branch of the Homeless Children's Aid and Adoption Society tuck into their harvest festival gifts, in October 1936
food + drinkThe harvest festival is back, but forget cans of tuna and packets of instant mash
Lewis Hamilton will start the Singapore Grand Prix from pole, with Nico Rosberg second and Daniel Ricciardo third
F1... for floodlit Singapore Grand Prix
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

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

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam