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LONDON — When Angela Ahrendts took over the helm of Burberry last year, one of her mantras was "innovate and elevate." The staff listened, and now the Burberry chief executive officer is having trouble sleeping at night.
Orders for luxury handbags — all costing upward of $1,000 — from Burberry's new Icons collection leaped to 200,000 units in March from 2,000 a year earlier and the company is fighting to keep up with demand.
"What keeps me up at night is the supply chain. We never really had one, we're in the process of building it — and it takes time," said Ahrendts from her bright, white office, the walls of which are studded with black-and-white images from Burberry's last ad campaign. "It's an amazing challenge to have, but it's a whole different game."
When she replaced the ever-energetic Rose Marie Bravo in July, the Indianapolis-born Ahrendts, 46, inherited a company that was already healthy, revitalized and holding its own on the London Stock Exchange, having just fully demerged from its parent, Great Universal Stores.
At the time, Ahrendts, who refers to herself as a "brand purist" and thinks of Burberry as a specialty, global luxury retailer, pledged to take the business to the next level. Over the past 10 months, she has attempted to hone Burberry's image and merchandise offer and flow product into stores more evenly throughout the year. The quick-shot growth that resulted was more than she was expecting.
In the 2006-07 fiscal year ended March 31, sales rose 14.4 percent to 850 million pounds, or $1.69 billion, from 743 million, or $1.48 billion. The third quarter, during which sales rose 22.6 percent, was the most successful quarter Burberry has had since it floated on the London Stock Exchange five years ago. Full results and profits will be released Thursday. In the past year, the company's share price has nearly doubled from 4.25 pounds to 7 pounds, or $13.65 at current exchange.
"The city [of London] has really given us such a vote of confidence, and it's not as if our profits have doubled or anything," said Stacey Cartwright, chief financial officer. Indeed, profits slid 4.9 percent to 106.4 million pounds, or $200 million, from 111.9 million pounds, or $209 million, due exclusively to costs related to the brand's technology overhaul program, Project Atlas.