The British luxury fashion house, Burberry, has faced significant challenges due to the COVID-19 pandemic. However, there are indications of a slight recovery in recent weeks. In the first half of 2020, Burberry experienced a drop of -31% in its turnover, which amounted to £878 million. Additionally, the house’s profit decreased to £48.3 million, three times less than the previous year.
The retail sector of Burberry was hit the hardest during the period from April to June, with a decline of -45% in sales. However, the decline in sales moderated from July to September, with a decrease of -6%. Despite the ongoing closure of 10% of Burberry’s store network due to health measures, the brand has reported “encouraging signs” of recovery in its activity in October. Notably, the United States, South Korea, and China have shown “double-digit growth,” with Burberry’s partnership with Tencent, a technological giant, playing a significant role in its digital activation in these regions.
Although the reduction in international tourist flows heavily disrupted sales figures in the EMEIA zone, Japan, and South Pacific Asia, online sales have shown more promising results with double-digit growth. This growth has also influenced the recruitment of new customers for the brand. Burberry’s CEO, Marco Gobbetti, acknowledges the initial disruption caused by the pandemic but remains optimistic about the overall recovery of the brand. Gobbetti states, “Although our momentum was disrupted by Covid-19 at the beginning of the year, we quickly adapted while still progressing according to our strategy. We are encouraged by our overall recovery and the strong response to our brand and product, especially among new and younger customers.”
Looking ahead, Burberry aims to drive performance and generate medium-term growth. The brand plans to reduce markdowns on its products and continue its global strategy, which includes implementing retail innovations, launching capsule collections, and strengthening brand content. Recently, Burberry unveiled a choreographed campaign featuring the French collective (La) Horde on the streets of London, signaling a potential step towards brighter days.
Useful links:
– Burberry Official Website
– CNBC Article: Burberry reports 6% decline in sales during Q2
