Burberry has reported "encouraging" initial progress from its transformation plan despite facing continued challenges in the luxury retail market. The London fashion house revealed retail revenues fell 6% to £433 million for the 13 weeks to June 28, compared with the same period last year.
The decline was partly attributed to currency rate impacts, but represented a slowdown in the group's sales fall as efforts to turn around its fortunes begin to take effect. Burberry has been under pressure from weaker luxury spending across global markets.
Cost-cutting programme underway
Last November, the group launched a £40 million cost-cutting programme after initially sinking to a loss. In May, the company announced proposals to cut about 1,700 jobs worldwide over the next two years as part of its comprehensive shake-up.
In its latest update, Burberry said it has made some progress in transformation efforts but remains in the "early stages" of the potential turnaround. The company stated it is continuing to prioritise investment and expects to see the impact of initiatives build as the year progresses.
Regional performance varies
The luxury brand pointed towards efforts to simplify operations and improve productivity to boost profit margins. In the latest quarter, Burberry reported improvements across its main regions, with strong sales of "outerwear and scarves".
Comparable retail sales grew 1% in Europe, the Middle East, India and Africa as positive local spending helped offset declines among tourists. The Americas business reported growth of 4% for the quarter.
Asia Pacific challenges persist
However, sales in Greater China fell 5% for the quarter, while the Asia Pacific division saw a 4% drop, driven by a "challenging performance in Japan". These declines highlighted ongoing difficulties in key Asian markets.
Joshua Schulman, chief executive of Burberry, said the improvement in first quarter comparable sales and strength in core categories gives conviction in the path ahead. He noted the autumn 2025 collection is being well received by luxury customers as it arrives in stores.
"Although the external environment remains challenging and we are still in the early stages of our transformation, we are encouraged by the initial progress we are starting to see," Schulman added.
(PA) Note: This article has been edited with the help of Artificial Intelligence.
