Check out of Burberry

Burberry has had a good, if slightly bumpy run, since being spun out of GUS last year. Rose Marie Bravo, the chief executive of Burberry, appears to have defied critics who dismissed the brand as a fashion fad and one-season wonder.

Last week the company announced that sales had increased 19 per cent to GBP593.6m for the 12 months to 31 March. Pre-tax profits were up at GBP85.1 m The share price fell on the back of a disappointing trading update, which warned that sales had been hit by the SARS epidemic, war in Iraq and fear of terrorism.

Analysts argue that Burberry should in fact be trading at a 20 per cent discount to rivals such as Gucci given its focus on clothing, which generates lower margins than accessories, and the magnitude of its wholesale business, which makes brand management difficult.

Burberry's Prorsum label, which accounts for only small percentage of its revenue and is overseen by creative director Christopher Bailey, is trying to move away from its continued dependence on its check designs.