- Coty Buys Southeast Asian Beauty Company
- Coty in Joint Venture in Brazil
- Burberry Sales Top $3 Billion Mark
That growth came in part from the Spanish market, where Burberry has recently switched its distribution from wholesale to retail. It also came from new or refurbished stores in the U.S. and Europe.
As reported, the group continues to expand its stand-alone stores. It will increase retail selling space by 14 percent in the second half and by a total of 13 percent for the financial year, which ends in March.
In late March, Burberry will open its first U.K. retail store outside London, in Manchester, England. The 3,200-square-foot store, to be located near the city's Harvey Nichols and Selfridges, will carry the Burberry Prorsum and London lines and offer the bespoke trenchcoat service.
Burberry has traditionally had a strong wholesale business in the U.K., but Cartwright said the time was right to seek growth through retail in its home market.
Wholesale sales in the period rose 19.4 percent to 43 million pounds, or $82.4 million, from 36 million pounds, or $62.9 million. The third quarter is generally not a strong one for wholesale, but Burberry has recently switched the timing for selected shipments from the first half to the third quarter.
The company has also increased its wholesale outlook for the second half and is now expecting a low- to mid-teen percentage increase in wholesale sales. This is due, Burberry said, to the new market calendar and replenishment program.
Licensing revenue in the quarter rose 5.6 percent to 19 million pounds, or $36.4 million, from 18 million pounds, or $31.5 million, led by Burberry fragrance launches last year and the watch collections. The company said it is expecting a mid- to-high single-digit percentage increase in licensing revenue in the second half.
Meanwhile, Burberry gave the financial details of the closure of its polo shirt factory in Treorchy, Wales, which it plans to shut because it is no longer commercially viable. The company said Tuesday it would incur a cash cost of 3.5 million pounds, or $6.9 million, to cover the redundancy packages, outplacement and training costs for employees, as well as a non-cash expense of 1.7 million pounds, or $3.3 million, linked to asset write-offs. Savings from the plant closure are expected to be 1.5 million pounds, or $2.9 million, annually.