Sales slow down at Burberry

12th Oct 2011 07:05

Sales growth decelerated across all divisions at Burberry in the second quarter, as the firm revealed that wholesale - which accounts for over a quarter of group revenues - would see a significant slowdown.The British luxury brand also did not address a key issue that the market was hoping for - how a supposed slowdown in growth in China was affecting the business.Revenues rose 30% from £641m to £830m in the six months to 30 September, as 34% growth in the first three months slowed to 26% growth in the second."Our first half performance, with 30% revenue growth, clearly demonstrates the continuing global momentum of the Burberry brand, underpinned by consistent and balanced double-digit growth in retail and wholesale, all regions and all product categories," said chief executive Angela Ahrendts.Retail sales rose 45%, with the stores acquired in China last year contributing 14% to this underlying growth, while licensing revenues increased by 4%.In Wholesale, revenue growth was 9% but would have been 20% if excluding China, the firm said. However, the planned shift from Wholesale to Retail is continuing in the second half and as the group is met with tougher comparatives, it expects revenues to increase by just a "mid single-digit percentage" on an underlying basis in the second half.There was no mention on the margin front, but Nomura analysts had expected first half margins to fall due to higher operating costs, including investment in flagship stores, customer services and share schemes.BC