For the first quarter of the current 2023 financial year, the British luxury group Burberry Group Plc can only post sales growth of one percent. The company cites the closure of stores in mainland China as the main reason for this. Sales in Asia-Pacific fell 16 percent and in Mainland China fell 35 percent. At the beginning of the quarter, around 40 percent of mainland China sales, including the digital hub, were disrupted by lockdowns.
The company said it had reported sales of 596.5 million euros (£505 million) in the first three months, up from 565.8 million euros (£479 million) in the same period last year.
Excluding Mainland China, comparable sales increased 16 percent, driven by the EMEIA region, where comparable sales increased 47 percent, according to the company. Here, sales to local customers have been strong and above pre-pandemic levels, and sales to American tourists have also recovered. In North and South America, sales fell by four percent.
At the same time, the customer experience in Burberry stores was further enhanced and the new design concept was rolled out at six additional locations during the quarter, including two stores in Japan, one in Hong Kong SAR, China and three in EMEIA. In addition, 65 redesigned stores are expected to open in fiscal year 2023, in addition to the 47 stores opened last year. – Burberry currently has 220 retail stores, 142 concessions, 57 outlets and 38 franchise stores worldwide – excluding pop-up stores.
In addition, Burberry plans a share buyback, which should start now. The company plans to buy back £400m worth of shares by the end of the financial year.
In the medium term, Burberry is aiming for sales growth in the high single digits and margins of 20 percent.