Burberry, the luxury fashion company, has released its preliminary results for FY21, revealing the impact of the pandemic on its sales. The company experienced a 10% decline in revenue at constant currency due to store closures and reduced tourism, amounting to £2.344 billion ($3.31 billion). However, there is positive news as parts of the world begin to reopen, with a rebound seen in the second half of the year, resulting in an overall 11% decline in reported revenue. The first half of the year was particularly challenging, with a 30% drop in revenue, but the second half saw an 8% increase as Burberry fought back.
Wholesale also experienced a decline of 17% for the year but showed a strong recovery in the second half. Despite the challenges, Burberry’s adjusted operating profit fell by 9% to £396 million, while reported operating profit increased by 176% to £521 million. Attributable profit rose to £376 million from £122 million.
Despite the major impact of the pandemic, Burberry’s leadership team successfully navigated the third year of its transformation program. The company announced that it had achieved the objectives for the first phase of its strategy and ended FY21 with strong full-price momentum. By focusing on reducing markdowns, Burberry achieved a notable 7% increase in comparable full-price sales for the year. The fourth quarter was particularly successful, with a 32% year-on-year increase in comparable sales, although they were down 5% compared to two years ago.
Burberry saw strategic growth in its product categories and selling prices while attracting new and younger customers through its increasing brand strength. Digital played a crucial role for Burberry during the pandemic, with innovative selling formats during lockdowns and the success of its social retail store in Shenzhen Bay. The company also adopted a highly localized approach in its branding, with emotive campaigns and activations tailored to each market. Burberry’s new collections resonated strongly with both new and repeat customers, supporting double-digit growth in full-price sales. The leather goods and outerwear categories saw mid- to high-single-digit growth respectively for FY21.
Moving forward, Burberry is confident in its position for growth and acceleration. The company plans to leverage its unique brand equity to deliver sustainable and high-quality growth while driving positive change. Key initiatives include implementing a new store concept, strengthening online sales, and reducing markdowns in its Mainline stores by the end of FY22. Despite the challenges posed by the pandemic, Burberry remains optimistic about its future prospects and aims to continue its journey of transformation and growth.
Useful links:
– Burberry’s Year of Transformation
– Burberry’s Preliminary Results for FY21
