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."

Sport
German supporters (left) and Argentina fans
world cup 2014Final gives England fans a choice between to old enemies
Arts and Entertainment
Armando Iannucci, the creator of 'The Thick of It' says he has
tvArmando Iannucci to concentrate on US show Veep
Life and Style
Pepper, the 3ft 11in shiny box of circuits who can tell jokes and respond to human emotions
techDavid McNeill tests the mettle of one of the new generation of androids being developed in Tokyo
Arts and Entertainment
A still from the worldwide Dawn of the Planet of the Apes trailer debut
film
PROMOTED VIDEO
News
ebookA unique anthology of reporting and analysis of a crucial period of history
Sport
Four ski officials in Slovenia have been suspended following allegations of results rigging
sportFour Slovenian officials suspended after allegations they helped violinist get slalom place
News
14 March 2011: George Clooney testifies before the Senate Foreign Relations Committee during a hearing titled 'Sudan and South Sudan: Independence and Insecurity.' Clooney is co-founder of the Satellite Sentinel Project which uses private satellites to collect evidence of crimes against civilian populations in Sudan
people
Arts and Entertainment
Balaban is indirectly responsible for the existence of Downton Abbey, having first discovered Julian Fellowes' talents as a screenwriter
tvCast members told to lose weight after snacking on set
Life and Style
More than half of young adults have engaged in 'unwanted but consensual sexting with a committed partner,' according to research
tech
Life and Style
A binge is classed as four or more alcoholic drinks for women and five or more for men, consumed over a roughly two-hour period
tech
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

Programme Support, Coms, Bristol, £300-350p/d

£300 - £350 per day + competitive: Orgtel: My client, a leading bank, is curre...

(Junior) IT Systems Administrator / Infrastructure Analyst

£28000 - £32000 per annum + pension, 25 days holiday: Ashdown Group: A highly ...

Finance Officer

Negotiable: Randstad Education Birmingham: Randstad Education are seeking a Fi...

Accounts Payable

£12 - £15 per hour: Cameron Kennedy Recruitment: Excellent opportunity to join...

Day In a Page

A History of the First World War in 100 Moments: Peace without magnanimity - the summit in a railway siding that ended the fighting

A History of the First World War in 100 Moments

Peace without magnanimity - the summit in a railway siding that ended the fighting
Scottish independence: How the Commonwealth Games could swing the vote

Scottish independence: How the Commonwealth Games could swing the vote

In the final part of our series, Chris Green arrives in Glasgow - a host city struggling to keep the politics out of its celebration of sport
Out in the cold: A writer spends a night on the streets and hears the stories of the homeless

A writer spends a night on the streets

Rough sleepers - the homeless, the destitute and the drunk - exist in every city. Will Nicoll meets those whose luck has run out
Striking new stations, high-speed links and (whisper it) better services - the UK's railways are entering a new golden age

UK's railways are entering a new golden age

New stations are opening across the country and our railways appear to be entering an era not seen in Britain since the early 1950s
Conchita Wurst becomes a 'bride' on the Paris catwalk - and proves there is life after Eurovision

Conchita becomes a 'bride' on Paris catwalk

Alexander Fury salutes the Eurovision Song Contest winner's latest triumph
Pétanque World Championship in Marseilles hit by

Pétanque 'world cup' hit by death threats

This year's most acrimonious sporting event took place in France, not Brazil. How did pétanque get so passionate?
Whelks are healthy, versatile and sustainable - so why did we stop eating them in the UK?

Why did we stop eating whelks?

Whelks were the Victorian equivalent of the donor kebab and our stocks are abundant. So why do we now export them all to the Far East?
10 best women's sunglasses

In the shade: 10 best women's sunglasses

From luxury bespoke eyewear to fun festival sunnies, we round up the shades to be seen in this summer
Germany vs Argentina World Cup 2014: Lionel Messi? Javier Mascherano is key for Argentina...

World Cup final: Messi? Mascherano is key for Argentina...

No 10 is always centre of attention but Barça team-mate is just as crucial to finalists’ hopes
Siobhan-Marie O’Connor: Swimmer knows she needs Glasgow joy on road to Rio

Siobhan-Marie O’Connor: Swimmer needs Glasgow joy on road to Rio

18-year-old says this month’s Commonwealth Games are a key staging post in her career before time slips away
The true Gaza back-story that the Israelis aren’t telling this week

The true Gaza back-story that the Israelis aren’t telling this week

A future Palestine state will have no borders and be an enclave within Israel, surrounded on all sides by Israeli-held territory, says Robert Fisk
A History of the First World War in 100 Moments: The German people demand an end to the fighting

A History of the First World War in 100 Moments

The German people demand an end to the fighting
New play by Oscar Wilde's grandson reveals what the Irish wit said at his trials

New play reveals what Oscar Wilde said at trials

For a century, what Wilde actually said at his trials was a mystery. But the recent discovery of shorthand notes changed that. Now his grandson Merlin Holland has turned them into a play
Can scientists save the world's sea life from

Can scientists save our sea life?

By the end of the century, the only living things left in our oceans could be plankton and jellyfish. Alex Renton meets the scientists who are trying to turn the tide
Richard III, Trafalgar Studios, review: Martin Freeman gives highly intelligent performance

Richard III review

Martin Freeman’s psychotic monarch is big on mockery but wanting in malice