Global luxury fashion brand Burberry saw comparable retail sales decline 9 percent during its third-quarter period, as tourist traffic slowed amid the continuing Covid-19 pandemic.
However, full-price sales jumped due to a decline in markdowns, and the business performed well in Asia-Pacific with comparable sales up 11 percent from strong growth in Mainland China and Korea.
Japan and the South Asia Pacific, however, continue to be affected by limited tourist traffic and store closures.
Full-priced sales increased by “double digits” in China, Korea, and the Americas, driven by Christmas and Lunar New Year campaigns, as well as a bigger focus on online pop-ups and activations supporting a 50 percent increase in full-priced sales in Burberry’s digital channel.
Europe, the Middle East, India, and Africa saw comparable sales fall 37 percent, due to falling tourist numbers, while the Americas fell 8 percent.
“The brand is pushing full-steam ahead with a full-price strategy to strengthen its gross margins as it continues to focus on driving online demand, particularly from new, younger customers,” said GlobalData’s Gemma Boothroyd.
“Burberry’s online capabilities will prove vital for its ability to navigate the uncertainty of Covid-19.”
And, with 15 percent of the business’ stores closed and 36 percent operating with reduced hours or restrictions, the business warned that uncertainty is leading to an uncertain trajectory moving into the fourth quarter.
“We expect trading will remain susceptible to regional disruptions as we close the financial year,” Burberry said.
“Notwithstanding any incremental lockdowns, we expect gross margins to benefit from positive full-price, regional and channel mix and lower stock provisions.”
According to Boothroyd, Burberry’s digital focus has set the standard for other players in the luxury industry, due to the introduction of features such as AR shopping and virtual try-on capabilities.
“The brand is also harnessing digital platforms to drive engagement through influencer partnerships,” Boothroyd said.
“Such initiatives will continue to be crucial in Burberry’s attempts to strengthen its appeal amongst a younger demographic.”