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Burberry bags good for profit

By FashionUnited

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Luxury goods group Burberry last week reported sales rose 3pc in the first half of the year boosted by demand for its handbags and catwalk collection Prorsum. Rose Marie Bravo, Burberry chief executive, said: "With cold weather arriving and the holidays approaching, we enter our most important time of year with cautious optimism."

The company also said Brian Blake, chief operating officer and a member of the board, had resigned "for family reasons". Stacey Cartwright, chief financial officer, said: "He'll be available to us until the end of the year but has resigned with immediate effect." She said Mr Blake would not be replaced immediately, adding: "We'll take our time and just review what the right structure might be."

Ms Bravo is stepping down as chief executive in July next year, to be replaced by Angela Ahrendts, and will become vice chairman of the group. Underlying sales rose 3pc to £355m, Burberry said, though wholesale revenues declined by 1pc. The company, which is 65pc owned by retail group GUS, said its expansion was on track with new store openings and the acquisition of Taiwan distributors in the first half.

GUS is expected to unveil details of the proposed demerger of Burberry when it reports first half results on Thursday. Burberry said pre-tax profits slipped to £78.1m in the first half from £79.4m the year before, from the cost of its Project Atlas restructuring programme. Underlying operating profits rose 2pc to £78.8m, Burberry said.

Ms Cartwright said: "Prorsum saw outstanding gains particularly in accessories. Womenswear was impacted by a soft spring season while menswear grew strongly."

She added: "We are very excited about our new Prorsum range of handbags which have gone down extremely well." Despite the dip in profits, the interim dividend is being lifted 25pc to 2.5p, payable on February 2. The shares fell 1½ to 394p in early trading.