Burberry reports 10% increase in first quarter profits

Burberry reported a 10 per cent increase in profits for the year to March 31, in line with expectations, with the luxury trenchcoat maker wringing higher sales from its stores even as it draws back from its wholesale and licensing business.

Revenue was down 2 per cent, to £2.8bn. But store sales, which account for 77 per cent of the total, increased 3 per cent, partly offsetting the expiry of brand licenses in Japan.

Christopher Bailey said: The actions we have taken to lay the foundations for future growth are yielding early benefits and I remain confident that these will build over time. Marco Gobbetti assumes the role of CEO from July. With his extensive experience in the sector, we will build on these foundations to elevate and strengthen the brand further and take Burberry to the next level as a global luxury retail and digital business. I am excited to work closely with him in this next chapter.

Burberry said it had delivered £20m of cost savings in the full year, in part by cutting the number of distinct products carried in its stores by nearly one-fifth It has been tinkering with product design, too, for instance in its leather goods line, where the company said it had “evolved Burberry’s handbag offering around a new pillar and shape strategy.”