Burberry’s comparable sales declined 45% in the first quarter of the year, compared with the same quarter in 2019, with progressive month by month improvement as Covid-19 related government restrictions eased, according to the company. Sales in Asia Pacific declined 10% in the quarter but are reported to have returned to growth in June; sales in Mainland China grew mid-teens in the quarter, but increased 30% in June ahead of the January pre- Covid level, supported by some repatriation of sales due to the Covid-19 travel restrictions, said Burberry. Sales in the EMEIA declined around 75%, and in the Americas, sales declined 70%. All product trends were negative in the quarter, impacted by Covid-19 related store closures. Burberry reported an outperformance of tops, bottoms and small leather goods, while leather goods full-price sales were up strongly in Mainland China and Korea.
Burberry said it has been adopting a localised approach by market and, for instance, it launched a leather goods campaign in Mainland China in April, which featured a series of more sustainable pop up stores incorporating an augmented reality experience, as well as a limited edition Pocket Bag for influential fashion blogger Mr Bags’ WeChat followers. “The reaction was exceptional, with the limited edition bag selling out within a minute of becoming available and Pocket Bag styles overall selling out within three weeks of the campaign going live”, said the company. As reported by ILM, Burberry is evolving its approach to product by creating three new business units covering Ready-to-Wear, Accessories and Shoes. The company said it intends “to pool expertise within each unit to enhance its product focus, increase agility and elevate quality”.
The British fashion label expects its second quarter, to end September 2020, to continue to be materially impacted by the pandemic, with tourist flows likely to remain negligible in retail, as store operations continue to face significant headwinds, with some remaining closed and operating with reduced trading hours. Based on its comparative retail sales performance in June 2020 (-20%), Burberry expects second-quarter sales to decline 15% – 20%. Wholesale sales for the first half of 2020 are expected to decline between 40% and 50%.