Most Recent Articles In Financial
Latest Financial Articles
- A.G. Lafley Reassures Shareholders at P&G's Annual Meeting
- Givaudan Q3 Sales Rise 2.6%
- Intercos Cancels Plan for IPO
More Articles By
LONDON — Outerwear, women's wear and the new Burberry Icons accessories collection drove second-quarter revenue at the company up 7 percent to 257 million pounds, or $481.8 million, from 240 million pounds, or $428.6 million.
In the first half ended Sept. 30, revenues rose 10.4 percent to 392 million pounds, or $719.5 million, from 355 million pounds, or $651 million, due to rising retail sales, Burberry said in a trading statement Wednesday.
All figures have been converted at average exchange rates for the respective periods. The company will release full profit and sales figures for the first half on Nov. 14.
It was an action-packed day for Burberry — at least on the London Stock Exchange, where the company's share price rose 9.3 percent on heavy volume. Burberry closed at 5.52 pounds, or $10.27, up 8.2 percent from the previous day's close.
The spike in the share price came amid rumors that PPR, parent of Gucci Group, was set to make a bid for the London-based company. A Burberry spokesman declined to comment on the share fluctuations, but analysts in London said it wasn't PPR that was driving up the price.
"I think it was the hedge funds driving today's activity," said one London-based equities analyst. "A lot of people expected Burberry's numbers to be better today. When they came in lower than expected, the hedge funds panicked and talked up the price so they could sell quickly — and not lose so much money. I think tomorrow you'll see the price settle right back down."
Another London-based analyst said PPR has indicated in the past it wants to invest in watches, jewelry and smaller luxury brands — certainly not an apparel-driven company like Burberry. "The company that everyone thinks PPR will buy is Bulgari — not Burberry. Burberry is really apparel — not accessories — driven."
Meanwhile, PPR was under the microscope on Wednesday because it was conducting an investors' day in Florence, Italy, the seat of Gucci Group. The London analysts also speculated that company principals may have referred to future acquisitions, which could have sparked speculation.
Burberry said Wednesday that it was accelerating its retail expansion plans for the 2006-07 fiscal year. It will open nine retail stores, 10 concessions and four outlets, increasing selling space by 13 percent for the year.