Burberry sounds sales alarm

BURBERRY, the iconic designer label run by Rose Marie Bravo, today warned that it could see a slowdown in sales in its second half, with wholesaling of its spring/summer range for 2005 likely to show 'mid-to-high single-digit growth'.

But it said its first-half performance and outlook 'is consistent with expectations for the financial year'.

Burberry said in a trading update that wholesale sales, which account for 57% of the total, had moved ahead by 13% on an underlying basis, driven by the US and Asia, although this fell to 8% on a reported basis because of the strength of currencies in its main export markets.

It made no comment on sales of its trade-mark checked baseball caps, which it is reported to have withdrawn after adverse publicity about them being worn by less desirable members of society than Burberry's normal target customers.

New stores helped drive retail sales up by 12% on an underlying basis in the six months to end-September. Four stores opened in the first half and four more are planned to open in the second.

The biggest growth came in the smallest division, licensing, which saw a 31% rise in sales thanks in the main to the launch of the fragrance BurberryBrit for men.

Bravo said: 'We are delighted with our new fragrance licence which will deliver ongoing financial and marketing benefits.'

The group has signed a new, long-term agreement with Inter Parfums, its existing producer of fragrances.