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24 February 2024

Asian shoppers and tourists boost Burberry

By Reuters

British luxury brand Burberry posted a 22 per cent rise in third-quarter revenue as wealthy shoppers and tourists, particularly in Asia, showed their resilience to shaky economies in Europe and the United States.             

The 156-year-old seller of raincoats and leather goods, known for its camel, red and black pattern, said on Tuesday it made £574 million ($880 million) of revenues in the three months to December 31.

That compared with an average forecast of £569m in a Reuters poll, and with first-half growth of 29 per cent.    

Sales in the Asia-Pacific region jumped 39 per cent to £210m, accounting for the largest proportion of the total, while strong demand from tourists drove sales in major cities like London, Paris and Hong Kong, Burberry said.            

Sales at retail outlets open over a year climbed 13 percent, just ahead of a forecast 12 per cent increase.

Luxury goods shares have wobbled in recent months amid signs of a slowdown in economic growth in China, the engine of recent strong demand for high-end goods, and fears the euro zone debt crisis could drag the world back into recession.               

Jeweller Tiffany and watchmaker Swatch last week warned of slower growth.

However, Swiss luxury group Richemont on Monday said its third-quarter sales held up well.      

Burberry said it remained mindful of the difficult economic backdrop, but was pressing ahead with its expansion plans, although it now expects retail selling space to rise 13-14 per cent in the second half, compared with 15 per cent previously.               

The group also said wholesale revenues were boosted by a rephasing of deliveries to the third quarter from the fourth.               

Burberry's shares, which rocketed around 10 times in value from November 2008 to July 2011, closed at 1,300 pence on Monday - some way below their peak of 1,610 pence, but also well clear of their October low of 1,034 pence.