The British Burberry group has managed record results for its past fiscal year (which ended 31 March 2014). Both turnover and profit rose sharply, despite CEO Christopher Bailey's exchange rate concerns.
2.87 billion euro turnover
The fashion house had a 17 % turnover increase to 2.33 billion British pounds (some 2.9 billion euro). Gross profit rose 8 % to 461 million pounds (nearly 570 million euro), perfectly in line with analysts' expectations.
Chief Creative and Chief Executive Officer Christopher Bailey, who succeeded Angela Ahrendts on 1 May, spoke of "outstanding brand momentum" despite "currency headwinds". He calculated that the yearly profit could have been 50 million pounds lower if current exchange rates had applied.
Decent retail growth
Its own retail turnover was an area of decent growth (+ 15 % to 1.62 billion pounds) and already represents 70 % of the group's total turnover, mostly thanks to increasingly blurry lines between online and offline retail. Burberry uses iPads in its stores, which generate 25 % of its online turnover, compared to only 15 % last year. Currently, Burberry has 215 single-brand stores, 227 department store concessions, 55 outlets and a web shop.
The wholesale branch's huge growth (+ 33 %) is mostly because of the "Beauty" line it launched in April 2013. Without beauty products, this branch's turnover only grew 2 %. As it now has its own beauty line, Burberry's licence branch has suffered a 28 % turnover drop as several deals were halted. On a like-for-like basis, it still managed a small 2 % increase.
Focus on Japan
The British fashion icon, founded 158 years ago, wants to expand its Japanese presence in the next 5 years to take full advantage of the booming Japanese luxury market, which is the world's largest (following the United States). Bailey emphasized that Burberry's 4 shops and 10 concessions in Japan displayed the strongest like-for-like turnover growth in the past two years. "Our peers generate 10 % of their global revenue in Japan while we are scarcely playing there", Pascal Perrier (Burberry's Asia Pacific chief executive) said to confirm Burberry's Japanese ambitions.
Burberry also intends to expand its Beauty business, while it has also confirmed its intention to enter the skin care market by the end of 2015.