UK, Hong Kong key for Burberry

14:14, February 25, 2010      

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Burberry Group Plc Chief Executive Officer Angela Ahrendts said demand for the retailer's luxury items, like a 2,395-pound ($3,696), leather-sleeved coat, show "no signs of slowing down" in the UK and Hong Kong.

"Things are getting better every day," Ahrendts said in an interview at the retailer's autumn/winter fashion show in London. Asia is "very strong", she added, while emerging markets are also showing growth.

The UK's largest luxury retailer is offering lower-priced versions of its gabardine trench coats and expanding its handbag and shoe ranges to drive profit growth globally.

The UK and Hong Kong each account for less than 10 percent of sales, according to the CEO.

Burberry is "aggressively looking" for more UK store space beyond its five outlets, Ahrendts said. This would include standalone Burberry 'Brit' stores, which sell only the casual range of clothing, such as 150-pound denim jeans and 295-pound packable trench coats.

"We really want to invest in London," she said. "We'd like more by the time the Olympics come here in 2012."

Burberry's third-quarter sales rose 15 percent, more than estimated, as consumers in Europe and Asia bought its handbags and trench coats, the company said on Jan 19. The CEO also said annual pretax profit would be at the "top end" of analyst expectations.

Burberry shares have climbed 29 percent in the last six months, the best performance on the 13-member Bloomberg European Fashion Index, which gained 17 percent.

Last week Burberry announced it's shutting down its Spanish clothing-design facility and cutting around 300 jobs to rein in costs at the unprofitable unit.

The retailer will stock its global collection in Spain and will continue to have a "strong presence".

Industry consolidation is not on the agenda, according to the CEO.

"Right now all our investors want us to continue to do what we are doing," she said. "Our focus is so insular. We don't waste much time looking outside."

Source: China Daily
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