Burberry continues global expansion with focus on Japanese growth
- 21st May 2014
- Business & Economy
After a strong set of financial results, Burberry has announced that it plans to continue focusing on achieving growth in Japan.
Burberry has become one of Britain’s most recognisable luxury brands in markets around the world. But now that it has put a troubling few years behind it with strong financial results, it plans to continue seeking out overseas growth.
The company announced earlier today that adjusted pre-tax profits for the year to the end of March stood at £461 million, an increase of eight per cent from 12 months ago.
Over the same period, revenue increased by 17 per cent to a total of £2.33 billion. Encouragingly, the majority of this improvement came from higher customer spending – overall retail sales rose by 15 per cent, making up 70 per cent of the total revenue.
This wasn’t necessarily down to more customers coming through the doors of Burberry’s stores. Footfall was not particularly strong, but the shoppers who came through the doors were in bullish mood. More customers actually bought goods from the retailer, while average spend also increased.
Burberry says that continued efforts to integrate its digital and physical presence have played an important role in its success, as has the decision to integrate its beauty business instead of working on a licensing basis.
Crucially, it has also said that these encouraging results will prompt the firm to continue with its push into Japan, the second largest luxury brand market in the world. In fact, it has set the ambitious target of increasing Japanese revenues fourfold to £100 million by 2017, doubling its store presence over that time.
The company is due to take full control of its operations in Japan next year. The Financial Times points out that the move echoes Burberry’s decision to take its Chinese operations in-house in 2010, allowing the firm to keep a closer eye on its brand image.
Christopher Bailey, who took over as chief executive on May 1st after Angela Ahrendts moved to a new role at Apple, warned that exchange rates could damage profits in the next year. If Japan’s yen remains low as a result of loose monetary policy, the Asian nation could be one of the places where a strengthening pound does most harm.
Either way, Mr Bailey remains optimistic, saying: “As we enter a new chapter, our teams are united and energised by the opportunities ahead – from unlocking Japan, to accelerating beauty and further integrating the physical and digital to deliver distinctive experiences.”
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