Burberry float to go ahead despite sales slump

Great Universal Stores, the retail conglomerate, insisted yesterday that the £1bn-plus float of its Burberry luxury goods brand would still go ahead by next June despite a significant hit to sales as a result of the terrorist attacks on the US.

Experian, the group's business information division, has also suffered with sales growth grinding to a halt in the US.

GUS reported in a trading statement that sales at Burberry's retail stores in the weeks following 11 September were down 15 per cent on last year. Sales in the past week were down 18 per cent, indicating a weakening trend.

However, GUS pointed to the strength of Burberry's performance over the whole trading period, which covered the six months to 30 September. Underlying sales were up by 31 per cent with sales at the retail division higher by 10 per cent.

David Tyler, GUS's finance director said: "Before 11 September all of our businesses were doing at least as well as the market was expecting, if not better." The attacks had "changed things" but the Burberry float was still on track "subject to market conditions", he said.

GUS added that America accounts for less than 20 per cent of Burberry's sales. Spain and Japan, which account for two-thirds of its sales, have been less affected. Burberry's new ranges feature a more restrained use of the brand's trademark check, which has become a hit with celebrities including Mick Jagger, who is said to be devoted to his Burberry cashmere hot-water bottle. Hot sellers include a "Breakthough" scarf at £50, a kilt dress modelled by Kate Moss in its adverts at £595, and a red shopping bag at £150. The traditional Burberry trench coat is also selling well, Mr Tyler said.

Argos, the catalogue shops business, was the best performer in the GUS portfolio, with a 13 per cent increase in like-for-like sales growth. Sales were particularly strong in furniture, white goods and consumer electronics. But the home shopping operation, which specialises in mail-order catalogues like Kays, saw sales fall by 3 per cent

At Experian underlying sales rose by 4 per cent on last year, but the US division was hit by a decline in mailshot activity in its marketing solutions division. Sales grew by just 1 per cent. The group has cut 340 jobs with further "flexibility" in its staffing if present conditions continue.

Investec Henderson Crosthwaite cut its full-year profit forecast by £10m to £518m. The company is due to report its interim results on 29 November.

GUS shares rose 23p to 557p.