Burberry float to go ahead despite drop in sales

GUS gave evidence yesterday that its Burberry brand continued to suffer in the last three months of 2001 from the slump in demand for luxury goods. But it vowed to press ahead with a partial flotation of the classic checks and camel clothing line in June. Burberry sales were 2 per cent lower in the three months to 31 December on a like-for-like basis but GUS said there were signs of a recovery from November.

After the 11 September terrorist attacks, Burberry sales fell 15 per cent when a general collapse in tourism added to a fall in demand for expensive goods. Yesterday, GUS said the 2002 Spring and Summer order book of the recently revamped line indicated "single digit" growth was likely this year.

GUS, which is Britain's second largest retailer, pointed to a better than expected performance from Argos. The catalogue retailer achieved a 14 per cent increase in like-for-like sales in the 14 weeks to 5 January, lifted by strong demand for furniture, DVDs, and video games. Total sales were up 17 per cent and gross margins were slightly higher. David Tyler, GUS's finance director, said the result was "ahead of expectations", but added that growth would slacken from this year's exceptional levels. GUS shares fell 7.5p to 648p.

Experian, GUS's financial credit checking business, which was badly affected by the 11 September attacks, achieved a solid recovery. Experian's underlying sales were 2 per cent in north America in the last three months of 2001, after falling 15 per cent in September.

Separately, Ted Baker reported brisk business in the period leading up to Christmas. The company said total sales were up 25 per cent in the eight weeks to 24 December compared with the same period last year. The increase was helped by a number of new stores being opened. Margins were down slightly as the trendy urban retailer increased its sales through discount outlets. Its shares moved up 1p to 308p.