Reuters - Video

EDITION: U.S. | U.K. | IN

Business

Burberry targets Japan for growth

Wednesday, May 21, 2014 - 02:01

May 21 - Burberry's profits have increased 30% in a year while luxury rivals have struggled. Their latest results continue the trend and Japan is now their new focus. Joanna Partridge looks at their business strategy?

▲ Hide Transcript

View Transcript

A man with expectation resting on his shoulders. Christopher Bailey's now Chief Creative and Chief Executive Officer of Burberry. In the first results announced since he took the helm, the British luxury brand unveiled an 8% rise in annual profits, in line with expectations. Bailey officially took over as CEO on May 1 from Angela Ahrendts, who left to join Apple. The firm has also raised its full year dividend and said it believes it can grow sustainably in future. But it said it could suffer from foreign exchange movements as it translates profit into sterling. Burberry's long focussed on China, now it's targetting Japan, the world's second largest luxury market with its trench coats, fashion and accessories. It wants to quadruple its revenue in Japan by 2017. That could be a good move, says Michael Hewson from CMC Markets, at a time when reports show sales of luxury goods are slowing, especially in China, Russia and Europe. SOUNDBITE: Michael Hewson, CMC Markets, saying (English): "We saw a very good GDP number out of Japan earlier this month, I think a lot of that was driven by the fact that a lot of Japanese consumers were front-running that rise in the sales tax. But also I think Burberry have embraced the digital world an awful lot better than say companies like Mulberry have. They've got boutiques in Amazon, so you can buy Burberry products directly from Amazon, they've also opened a digital boutique in China as well." Investors seemed to like the strategy. Despite some initial concerns about Bailey's dual role, Burberry shares have risen 2% over the past six months. That run may continue says Patrick Armstrong from Armstrong Investment Management. SOUNDBITE: Patrick Armstrong, Armstrong Investment Management, saying (English): "I think any company that's got a very strong brand, that has a price setter and exposure to Asia, I think those stocks are going to continue to do well." Burberry has been taking back control of important parts of the business from licensed vendors. Expiring third-party sales licenses in Japan give it free rein as it expands there.

Burberry targets Japan for growth

Wednesday, May 21, 2014 - 02:01

Money »

S&P 500 just shy of record S&P 500 just shy of record

5:35pm EDT - (2:23)

Apple hits $100 a share Apple hits $100 a share

Tue, Aug 19, 2014 - (2:06)

Nasdaq closes at 14-year high Nasdaq closes at 14-year high

Mon, Aug 18, 2014 - (2:23)

Putin puts Wall Street in buying mood Putin puts Wall Street in buying mood

Thu, Aug 14, 2014 - (2:10)

We've become a promotional culture-RetailMeNot's Bodge We've become a promotional...

Thu, Aug 14, 2014 - (4:39)

Dow back to positive territory for year Dow back to positive territory for year

Wed, Aug 13, 2014 - (2:18)

Markets cheer Russia's Ukraine exit Markets cheer Russia's Ukraine exit

Fri, Aug 08, 2014 - (1:50)

Russia, Iraq push Dow to three-month low Russia, Iraq push Dow to three-month low

Thu, Aug 07, 2014 - (2:27)

Wall Street gains but telecom disconnected Wall Street gains but telecom disconnected

Wed, Aug 06, 2014 - (2:28)

Stocks zapped by energy weakness Stocks zapped by energy weakness

Tue, Aug 05, 2014 - (2:46)

Stocks recover with refocus on earnings Stocks recover with refocus on earnings

Mon, Aug 04, 2014 - (2:19)

The Exchange »

The Exchange: Hot commodity The Exchange: Hot commodity

Wed, Jul 16, 2014 - (9:25)

The Exchange: Constitutional crusade The Exchange: Constitutional crusade

Wed, Jun 25, 2014 - (11:35)

The Exchange: The value of money The Exchange: The value of money

Mon, Jun 02, 2014 - (9:53)

The Exchange: China’s Second Continent The Exchange: China’s Second Continent

Tue, May 27, 2014 - (9:35)

The Exchange: A master of business arts The Exchange: A master of business arts

Thu, May 08, 2014 - (8:24)

The Exchange: America's bankrupt cities The Exchange: America's bankrupt cities

Mon, May 05, 2014 - (8:52)

The Exchange: Let the rocking commence The Exchange: Let the rocking commence

Tue, Apr 08, 2014 - (8:13)

The Exchange: The Moneyball fallacies The Exchange: The Moneyball fallacies

Mon, Mar 24, 2014 - (9:54)

Is doing good a good business? Is doing good a good business?

Mon, Mar 17, 2014 - (7:38)

Reuters Investigates »

Re-homing victim: "I could have been dead" Re-homing victim: "I could have been dead"

Wed, Feb 19, 2014 - (8:24)

Cops and loggers in the Amazon rainforest Cops and loggers in the Amazon rainforest

Fri, Jan 10, 2014 - (4:01)

"Passed around like a dog" "Passed around like a dog"

Thu, Aug 29, 2013 - (6:32)

Adopted, then abandoned online Adopted, then abandoned online

Thu, Aug 29, 2013 - (13:21)

How the DEA keeps its secrets secret How the DEA keeps its secrets secret

Mon, Aug 05, 2013 - (1:36)

How education lost its role as the great equalizer - Reuters Investigates How education lost its role as the great...

Mon, Dec 17, 2012 - (7:52)

Jihad Jane: From abused child to American jihadist - Reuters Investigates Jihad Jane: From abused child to American...

Sat, Dec 08, 2012 - (10:01)

Jihad Jane: The order to kill - Reuters Investigates Jihad Jane: The order to kill - Reuters...

Sun, Dec 09, 2012 - (10:39)

Moving Pictures »

"Old timers" sail the Chesapeake Bay "Old timers" sail the Chesapeake Bay

Mon, Aug 11, 2014 - (2:27)

Burned memories Burned memories

Fri, Aug 08, 2014 - (3:02)

Images of July Images of July

Thu, Jul 31, 2014 - (1:20)

World Cup: passion on the pitch World Cup: passion on the pitch

Fri, Jul 11, 2014 - (1:00)

A refugee in America gives back A refugee in America gives back

Wed, Jul 02, 2014 - (3:25)

A long search for refuge A long search for refuge

Fri, Jun 20, 2014 - (3:04)

World Cup: Around the globe in 50 goals World Cup: Around the globe in 50 goals

Fri, Jun 06, 2014 - (1:08)

VIVID – Sydney’s spectacle of light VIVID – Sydney’s spectacle of light

Fri, May 30, 2014 - (1:37)

The week that changed Boston The week that changed Boston

Mon, Apr 14, 2014 - (3:28)