Burberry upbeat on China prospects as it reveals strong menswear sales
Burberry today struck an upbeat note on its prospects in China, as an emerging army of luxury shoppers in the Asian country helped to drive a sharp uplift in annual profits.
The luxury brand also revealed strong menswear sales last year, and said it will showcase its latest lines for men at a fashion event in London in June, following more than a decade in Milan.
Burberry plans to open three flagship stores in Shanghai this financial year but its chief executive also stressed the growing importance to its business globally of travelling Chinese shoppers.
The brand issued a profits warning last year, partly due to slower sales in China which had been growing at a breakneck pace of 30 per cent in 2011. Boosted by 11 new stores, Burberry still grew revenues in China by 20 per cent last year which the group's chief executive Angela Ahrendts hailed as an "outperformance" compared with rivals in China.
She said: "This is the new norm there. There has been a lot of government and policy changes, and we are thrilled to be up by 20 per cent and to continue to invest [in China]."
Ahrendts added: "There are 100 million consumers who will travel outside of mainland China over the next couple of years".
Burberry grew underlying profits by 14 per cent to £428 million in the year to March 31. This was driven by its Asia-Pacific engine, which lifted revenues by 13 per cent to £745.3 million over the year, although it also enjoyed robust growth in the US, France, Germany and India.
Revenue jumped by 8 per cent to £2 billion, and the group grew its full-year dividend by 16 per cent to 29p. Last year, Burberry took its perfume operation in-house by ending its contract with partner, Interparfums, the French company also responsible for fragrances belonging to Jimmy Choo and Montblanc.
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