Burberry returned to growth last quarter, helped by a £125m boost from the falling pound, but its shares slumped as much as 9 per cent as concerns about growth in key Asian markets spooked investors.
Many UK retailers have been hit by increased import costs as the pound has taken a battering but Burberry, which makes 80 per cent of its sales outside the the country, and incurs around 40 per cent of its costs here, has benefited.
The luxury fashion house has also seen a 30 per cent sales surge at its London stores as the weakened currency has given foreign tourists more money to spend.
“The Chinese are very much part of that, but all tourists are up in this quarter, the US as well,” chief financial officer Carol Fairweather said.
“[They are] clearly influenced by foreign exchange rates movements but they are also really responding to everything they are seeing in the stores.”
Last month the company launched its first ever “see now, buy now” collection, which attracted 4 million views. Burberry has been one of the stock market’s top post-Brexit performers but double-digit sales falls in Hong Kong and what Fairweather described as a “difficult time” in the US, sent the stock into reverse.
Retail sales were up 2 per cent but disappointing wholesale and licencing revenues dragged total revenues down 4 per cent to £1.16bn.
Christopher Bailey, who will step down as chief executive to become president next year, handing over his former role to Marco Gobbetti of Celine next year, said the current environment was “challenging”.
“The progress we are making to improve our ways of working, the agility of our teams to react to changes in consumer behaviour and the strength of our brand give us confidence for the future. We remain on track to deliver our financial goals,” Mr Bailey said.
