Mixed messages from Burberry

Luxury goods group Burberry reported an 11 percent underlying sales rise in its retail division for the third quarter, while dismissing a 21 percent drop in underlying wholesale revenues. The group, which recently demerged from former parent company GUS, said that the third quarter was relatively immaterial, with the slide reflecting the move of some markets from wholesale to retail. Finance director Stacey Cartwright, however, admitted that there had been a lower rate of reordering in the US , and it was unlikely that these US clients were to increase their orders soon. "We will plan more conservatively next time," she told the FT.

Meanwhile the retail division - which accounts for 68 percent of total sales - saw underlying sales rise 11 percent, and 21 percent on a reported basis to £115 million. About 5 percent of the rise can be attributed to the acquisition of 12 stores in Taiwan . Total group sales rose 4.3 percent to £168 million in the third quarter ended 31 December 2005 or 1 percent excluding the acquisition of the business in Taiwan and the shift in operations in Spain from wholesale to retail. New store openings in the UK and Continental Europe also helped stimulate the business.

"The favourable initial response to early spring deliveries across all categories provides a good start to Burberry's 150th year," Rosemarie Bravo, Burberry's outgoing chief executive, said in a statement on Wednesday. Licensing revenues remained flat at £18 million, compared with the same period last year. Japan saw a slight increase in licensing revenue thanks to royalty rate increases. Global product licenses for fragrance and watches also performed according to expectations. Cartwright said that the US would remain Burberry's main focus in the coming fiscal year, and said that more stores openings would take place.