Burberry says turnaround plan showing early progress despite festive sales dip

Luxury fashion brand Burberry has reported a dip in sales over the festive period as it said it was moving with "urgency" to turn the business around and return to profit.

The fashion house, founded in England in 1856, launched a £40 million cost-cutting programme in November after sinking into a loss.

In an update to shareholders on Friday, Burberry said the turnaround plan was already starting to pay off.

It nevertheless reported revenues of £659 million for the 13 weeks to 28 December, down 7% from the £706 million generated over the same period a year prior.

Store sales grew in America, boosted by locals and its refurbished New York shop, while sales decreased in Europe, the Middle East and Africa driven by both locals and tourists.

Sales dropped by nearly a tenth in Asia, with the key Chinese market having particularly struggled amid a more stagnant market in the luxury sector over recent years.

Burberry said it was steaming ahead with its plan to turn around the business, which was launched in November after reporting a £53 million loss for the first half of its financial year.

It is now expecting its results over the second half of the financial year to "broadly offset" the loss recorded over the first half, "notwithstanding the uncertain macroeconomic environment".

Joshua Schulman, Burberry’s Chief Executive, said: "We are encouraged by the response to our It’s Always Burberry Weather outerwear campaign and Wrapped in Burberry festive campaign.

"These activations resonated with a broad range of luxury customers, leading to an improvement in brand desirability and strength in outerwear and scarves."

He said the company believes the strategy will deliver "sustainable, profitable growth over time", adding: "However, we recognise that it is still very early in our transformation and there remains much to do."