On Thursday, the British luxury goods group Burberry (Burberry) announced (as of September 26) key financial data for the first half of the 2021 fiscal year. The company said that there have been signs of recovery, and sales in October resumed growth. The data reported in the first half of the fiscal year has improved significantly.
In the six months ended September 26, Burberry’s key financial data are as follows:
- sales fell 31% year-on-year to 878 million pounds, same-store retail sales fell 25% year-on-year
- operating profit fell 56% year-on-year to 88 million pounds
- Adjusted operating profit fell by 75% year-on-year to £51 million
- Adjusted operating profit margin fell from 15.9% to 5.8%
- Adjusted profit before tax fell 82% to £36 million
Burberry CEO Marco Gobbetti The statement said: "At the beginning of the year, the new crown epidemic disrupted our development momentum, but we quickly made adjustments and made further strategic progress. Although the epidemic continues to affect EMEIA (Europe, Middle East, India and Africa) , Japan, and South Asia Pacific regions, but we are encouraged by the overall recovery of the company and the strong response to our brand and products — especially among new and young customers. We will continue to provide excellent products, Take local planning, transfer resources, and at the same time use our digital platform advantages to motivate customers.”
Burberry's recovery trajectory is obvious. Same-store comparable sales in the first quarter fell 45% year-on-year, the second quarter fell 6%, and then recovered in October increase. But it did not give specific performance data for October.
In the second quarter, the lockdown of the epidemic caused EMEIA (Europe, Middle East, India and Africa), Japan and South Asia and the Pacific to be in trouble due to "significant weakness in tourism." Currently in Europe, Burberry is still forced to close about 10% of its stores. The good news is that Burberry's sales in Mainland China, South Korea and the United States have achieved strong double-digit growth in the second quarter.
In Asia, same-store sales increased by 10%, and strong growth in mainland China and South Korea "offset the weak performance of other Asian markets, including Hong Kong Special Administrative Region and Australia."
In Mainland China, Burberry has seen “consumers’ positive feedback on local advertising campaigns, as well as enthusiastic responses to core categories-leather goods (especially Pocket bags) and outerwear. The core categories achieved double-digit numbers in the second quarter of this year. quickly growing". In general, since May, Mainland China has "achieved good double-digit growth in all-price channels."
The local Chinese activities endorsed by Zhou Dongyu and Song Weilong have generated nearly 100 million views and approximately 4 million interactions through social media channels. Marco Gobbetti called it "the highest interaction rate ever."
In the Americas, Burberry's same-store sales in the second quarter increased by 21%. Among them, sales in the United States were higher than the regional average. "This was driven by the growth momentum of new customers and young customers, as well as the full price channel." .
Burberry did not give full-year performance expectations.
Burberry also mentioned a number of strategic developments, including full-price sales, leather products, digital channels and young customers. It is a key strategy for Burberry to sell
full-price products at full price
. As the brand “resonates and attracts new young consumers”, Burberry decided to reduce the discount. Burberry said, "The weight of the full-price channel has increased significantly and the product response has been enthusiastic." it reminded that "this will be an unfavorable factor affecting the second half of the fiscal year, mainly affecting the third quarter, but this is in the long-term interests of the brand."
In fact, Burberry's momentum before the epidemic looks very good. In January before the outbreak, it achieved double-digit comparable store sales growth. But in the following first half of the fiscal year, 60% of the doorsThe shop was forced to close.
Burberry is quickly adapting to the current environment. It said it has "repositioned" its business "to seize opportunities in the market rebound and local consumption trends, and to transfer resources where needed", including localized production in China and South Korea.
leather goods
Burberry said "the growth of leather goods exceeds the average same-store retail level."
Marco Gobbetti said: "The handbag series architecture we have established-Lola, TB, Pocket and Title, now account for most of the full-price handbag sales. The new Olympia bag has also seen a strong start." All categories of
were affected by store closures in the first quarter of this fiscal year, but improved in the second quarter. Leather goods saw low-single-digit growth in the second quarter; menswear performed well “thanks to the good promotion of knitwear and trousers”; womenswear also performed well in dresses and knitwear; but outerwear “was blocked and home Office impact".
digital channel
Burberry said that the digital channel has achieved high double-digit growth.
Burberry has increased the intensity of digital activities, such as more in-depth game development, building digital pop-up stores, and "increasing exposure on third-party platforms." In September, it participated in Tmall's "Super Brand Day" event, which promoted the realization of Tmall's highest single-day sales so far.
The company has also expanded its reservation shopping strategy and introduced new reservations related to local conditions, such as home reservations, online reservations and styling activities, "providing a luxury shopping experience and ensuring customers feel safe."
It is also committed to integrating offline and online businesses as closely as possible. In July of this year, Burberry and Tencent exclusively cooperated to open the first social retail store in Shenzhen Bay Mixc (see Luxe.Co report for details: Luxe.co. Fashion Store New Observations | Burberry, Tom Dixon, MANITO: Coordinates Shenzhen, Beijing (Issue 1, 2020) ), Burberry stated that “the result exceeded our expectations and attracted a new generation of young consumers of the brand”. It also launched a new online and offline customer experience, "connecting consumers browsing online directly with store shopping guides."
For the six months ended September 26, Burberry's performance in various channels is as follows:
- retail channel: sales fell 30% year-on-year to 704 million pounds
- wholesale channel: sales fell 38% year-on-year to 156 million pounds
- authorization Operating channels: Sales fell 24% year-on-year to 18 million pounds
In the six months ended September 26, the performance of Burberry's retail and wholesale channels in various markets is as follows:
- Asia Pacific: Sales fell 12% year-on-year to 439 million GBP
- EMEIA: Sales fell 49% year-on-year to GBP 251 million
- Americas: Sales fell 37% year-on-year to GBP 170 million
In the six months ended September 26, Burberry's retail and wholesale channels performed in various categories as follows:
- Accessories: sales decreased by 34% year-on-year to 301 million pounds
- women's clothing: sales decreased by 38% year-on-year to 242 million pounds
- men's clothing: sales decreased by 26% year-on-year to 258 million pounds
- children's clothing and others: sales decreased by 10% year-on-year Up to 59 million pounds
