Thursday, 16th May: Burberry release their preliminary results for the full fiscal year today, which failed to impress the market. The luxury retailer, well-known for their iconic tartan print which had a successful re-vamp under the control of Angela Ahrendts in 2006 took a different route in the most recent seasons in the hands of the new creative director Riccardo Tisci, who has previously worked with Givenchy and Versace.
His collection introduced a fresh look at Burberry which slightly drifted away from the classic tartan print and instead focused on something the entire industry has been thriving off in recent seasons – the monogram trend. Whether you think its tacky to wear something plastered in a logo or not, it’s working, and they’ve all been doing it; Louis Vuitton, Christian Dior, Gucci, and now Burberry, it’s plastered all over the runway and consumers can’t get enough of it.
However, Burberry can’t seem to gain the same traction as the other brands. The collection was a massive hit, but something doesn’t quite add up. Revenue was 0.4% lower in comparison to the previous year, but higher than what the market had predicted. The group also increased their dividend by almost 3.0%. It was pre-tax profit figures the market really focused on though, which grew by 6.8% but fell short of expectations.
The group were optimistic Tisci would be able to introduce something which would transform their image and push them to be seen as an elite brand like Dior etc, but subdued growth in Asia, which accounts for a large 41% of revenue, didn’t help either. The group closed almost 6.0% lower today and stayed at the bottom end of the blue-chip index the entire day.
Further political uncertainty today pushed sterling down to new three-month lows against the dollar, down 0.413% to $1.2794 at 16:45 (BST). The index consequently travelled in the opposite direction, closing 0.78% higher at 7353.51.