Burberry Reports Strong Q1 Sales As Business in China Recovers — Retail Bum

Burberry Q1 sales increased by 18%, meeting market expectations, as the brand continued to benefit from the rebound in the luxury sector in China.

Sales in mainland China were up 46% in the 13 weeks leading up to July 1. Meanwhile, sales in Europe increased by 17% thanks to inbound tourism from the U.S. and Middle East.

That said, the luxury brand’s business in the Americas continued to suffer, with Q1 sales down 8%, after dropping by another 7% in the previous quarter.

“I think (demand from) the aspirational shopper has weakened a little … but we’re picking up in the higher net worth individual cohort, and they’re buying higher-priced products in leather goods and outerwear,” said Burberry interim finance chief Ian Brimicombe.

Brimicombe added that more tourists are headed to Europe instead of London, impacting home market sales. The brand is thus pushing the U.K. government to reintroduce tax-free shopping for tourists.

While sales in certain markets are suffering, the brand is enjoying high demand for its outwear and leather products. New products from creative chief Daniel Lee are expected to hit the stores in September.