No change in strategy for Burberry, following surprise profit warning
Burberry CEO Angela Ahrendts told the WSJ, the British label would not make changes to its strategy, after revealing a surprise profit warning last week and reporting its worst retail sales growth since the financial crisis.
“We aren’t changing strategies,” Ms. Ahrendts said in a brief interview after Burberry unveiled its Spring/Summer 2013 collection at London Fashion Week on Monday, where the front row included celebrities such as tennis star Andy Murray, actor Dev Patel and Samantha Cameron, wife of U.K. Prime Minister David Cameron.
Ms. Ahrendts said Burberry cannot control the external consumer environment, which includes continued economic turbulence in Europe and decelerating growth in China, one of Burberry’s most important markets. “Can anyone control China?” she asked, noting that analyst reports suggest growth in the country will continue despite the recent slowdown.
Last week, Burberry informed the market in a surprise announcement that same-store retail sales for the first 10 weeks of its current fiscal quarter were flat—the fashion house’s worst performance since 2008—and warned that full-year pretax profit would come in at the low end of market expectations. The profit warning sent Burberry’s shares plummeting 21% to GBP 10.88 on the day of the announcement. The stock has fallen further, to GBP 10.71 a share, since then.
Asked if the new designs would revive Burberry sales, Ms. Ahrendts said it was one of Mr. Bailey’s “most magnificent” shows, with clear nods to Burberry’s trench coat heritage, but noted that a successful business is about “steady” performance, not one collection or one quarter’s sales.