Burberry has shown signs that its turnaround focusing on ‘cool Britannia’ is paying off.
Chief executive Joshua Schulman said his strategy to emulate ‘timeless British luxury’ was paying off as sales rose 3 per cent to £665million for the 13 weeks to 27 December.
He pointed to strong demand from Gen Z shoppers in Greater China, where sales rose 6 per cent in the period, raising hopes for a luxury revival in the region.
China has been a particular pain point for the firm and the wider sector after economic woes have dented demand for high-price goods in recent years.
Some products, including the group’s famous cashmere check scarf which costs £435, have become ‘a must have for the Gen Z customer,’ he said.
Schulman said: ‘We’ve been really pleased with our traction with a younger consumer.’
The retailer has been focusing on its trademark outwear products including its trench coat and scarves
He said he did not want the retailer to be a ‘niche brand’ and his ‘Burberry Forward’ strategy was about ‘focusing on this timeless, British luxury brand expression, but showing it through a lens that is relatable to a broad array of luxury consumers.’
But sales in its segment for Europe, the Middle East, India, and Africa, were flat ‘with locals offsetting declines in tourist spend which continued to impact performance,’ the update said.
Schulman said it was an ‘enormous shame’ that the current and previous Governments had not listened to the luxury industry’s calls for VAT-free shopping for tourists to be reinstated.
This was holding back tourism spending in the UK’s capital from recovering to pre-pandemic levels, while it was soaring beyond this in Paris, he said.
‘And it just seems to be an enormous missed opportunity, particularly for British brands, [it is a] missed opportunity for us to engage tourists here who are going to want to buy a souvenir of their time visiting London or visiting Britain.’
Shares rose 4 per cent following the update. They have risen 25per cent in the past year thanks to renewed hopes in Burberry’s strategy.
Adam Vettese, market analyst for eToro, said: ‘Shares are up this morning, having clawed their way back from multi-year lows over the last 12 months. There is scope for modest near‑term upside if the market buys the China rebound, but the recovery story is only just starting and much of it could well already be priced in.
‘For believers, it’s a higher conviction hold; for the sceptical, a watch for flawless delivery amid macro headwinds.’
The group has been pinning its hopes on a boom in the popularity of Britishness to revive sales.
Earlier this month, boss Schulman said the UK’s style, a mix of traditional and funky, was turning into ‘a global language’ whose ‘stories’ resonated worldwide.
The label has also been appearing more frequently in celebrity wardrobes including that of Traitors host Claudia Winkleman, whose signature look is UK country wear with a punk twist.
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