Burberry (LSE:BRBY) have announced a decline in like-for-like sales warning of further declines in wholesale revenue in the six months ending 30 September.
In what has been a challenging year for the iconic British fashion institution, Burberry’s recent announcement of a reshuffle in the boardroom came too late to prevent a slide in performance; like-for-like sales dropped 3% with underlying retail revenue remaining unchanged at £423m.
Changes at the top mean Marco Gobbetti will replace current chief executive Christopher Bailey, Bailey will become ‘President’ and chief creative officer.
Christopher Bailey, who will remain as chief executive until Marco Gobbetti’s appointment next year attributed the dip in performance to challenging ‘external environments’ as the company has faced continuous declines in sales over the past 12 months across its main consumer regions in the Asia Pacific.
Areas such as Hong Kong have seen double digit declines as consumer spending has fallen driven by reduction in tourism from regions such as Japan and Beijing that are home to one of its largest markets.
Burberry said it expects wholesale revenue in the next six months ending September 30 to be down 10% compared to last year.
As a result of the recent Brexit vote, the company said that if exchange rates remain at current levels, adjusted profits would benefit by £90m as the pound has recently fallen against the dollar and yuan slipping to a 31 year low.
Soon to be Chief Creative and current Chief Executive Christopher Bailey said:
“We continue to focus on managing our business with agility whilst implementing the ambitious evolution of our strategies and ways of working we outlined in May, to position Burberry for long-term growth. These plans are now well underway and on track to deliver our financial goals
This progress, together with our recent management appointments, gives us real confidence for the future”
At 11:59am BST Burberry Group PLC traded at 1,284.00 +81.00 (6.73%)
