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Burberry set fair for change at the top

Wednesday, Jan 15, 2014 - 02:13

Jan 15 - British luxury brand Burberry has posted a 14 percent rise in underlying retail revenue in the Christmas quarter but it warned of currency challenges ahead. With CEO Angela Ahrendts leaving in April Hayley Platt asks what impact a change of leader will have on one of the UK's best exports.

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A 14% rise in revenue for the Christmas quarter and a 12% increase in sales. The results from Burberry were enough to send shares up 6%. But the UK luxury fashion brand is still bracing for rough weather. CEO Angela Ahrendts warned exchange rates could prove a "significant headwind." Luca Solca is from Exane BNP Paribas. SOUNDBITE: LUCA SOLCA, MD, Global Luxury goods, Exane BNP Paribas, saying (English): "They certainly reported very strong like-for-like growth at 12% versus expectations of 8%." Burberry is best known for its trademark raincoats - its outerwear and large leather goods contributed about half of the growth. Men's accessories and tailoring also grew strongly. And online sales rose, helped by Burberry's click and collect service. The group opened five new stores in the period, including the first Burberry Beauty Box in London's Covent Garden and two stores in China. SOUNDBITE: LUCA SOLCA, MD, Global Luxury goods, Exane BNP Paribas, saying (English): "We expect two thirds of the luxury market growth to come from the Chinese expenditure in 2014. I expect that Burberry's, certainly showing strong momentum as a brand and it's possibly well positioned to lead with middle class demand in China and in other emerging markets." The Asia-Pacific region delivered double digit sales growth. Demand in the US and Japan remains strong and tourist spending in Europe should also pick up. Burberry shares have now risen 13% over the year and Ahrendts has been credited with much of the improvement. Her Creative Director Christopher Bailey has too - and he'll become CEO as well in April when Ahrendts joins Apple. SOUNDBITE: LUCA SOLCA, MD, Global Luxury goods, Exane BNP Paribas, saying (English): "It's the first time that a creative director is appointed CEO of a company that he has not founded himself and so it's going to be very interesting to watch. Clearly Christopher is no outsider and has been instrumental in driving Burberry where it is today. I think he will have to face new challenges and build new experiences in his new role." Investors probably won't welcome Ahrendt's departure but Bailey looks set to take the helm of a brand in pretty good shape.

Burberry set fair for change at the top

Wednesday, Jan 15, 2014 - 02:13

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