Burberry profits slide

Profits at Burberry dropped 4.9 percent last year to £106.4 million from £111.9 million. The dip was the result of costs related to the company's technology revamp, Project Atlas. Operating profit before Atlas-related costs gained 2.7 percent to £165.6 million. For the fiscal year ended 31 March, turnover rose 3.8 percent to £742.9 billion from £715.5 billion.

"In a year of transition and investment, the group achieved solid financial results," chief executive Rose Marie Bravo said in a statement last week. "With a strong spring season underway, we enter our 150th year with confidence in Burberry's future." Bravo spoke for the last time as chief executive of Burberry. Angela Ahrendts will be taking over from her in July.

Chief financial officer Stacey Cartwright was optimistic about the number. "Underlying profit for the year was actually up 5 percent, and the decline was just due to costs linked to the preparation and initiation of Project Atlas," she said. "By October, we're going to have global sales and stock transparency - which we've never had before. We'll be able to have early visibility on sales and stock trends, and frankly I can't wait."

Atlas costs for the current year are expected to be around £19 million. Burberry expects a "significant" negative exchange rate comparison due to the weak dollar, while licensing revenue is expected to remain flat. Meanwhile, first half wholesale sales rose slightly. Sales last year rose, thanks partly to strong sales in the US and in the Asian Pacific region. New franchised stores in emerging markets like Poland, Turkey, India and Mexico were also said to have contributed to the gains. European sales remained flat, with weak performances in Spain and the UK. The rest of Europe enjoyed strong sales.

Burberry intends to increase its selling space by at least 10 percent in the current year. Over the next six months, new retail stores are planned for Atlantic City and Riverside, NJ, Kansas City, Madrid, Sydney and Vienna. The company will also continue to focus on openings in the US and Asian markets.