Wealthy lap up luxury brands: Sales soar at Burberry and Cartier-owner Richemont as they put the pandemic behind them
Luxury brands are roaring back to life as they put the pandemic behind them.
In separate bullish updates to investors, the British fashion house Burberry and Swiss giant Richemont have reported soaring sales in the run-up to Christmas.
The figures sent shares in Burberry 6.3 per cent higher in London while Richemont, whose brands include Cartier, and Montblanc, was up 5.1 per cent in Zurich.
British fashion house Burberry said sales before Christmas were 5% higher than a year earlier as £723m of bags, hats, scarves, coats and other clothing flew off the shelves
Chris Beauchamp, the chief market analyst at IG Group, said: ‘The chasm in the global economy is clearly illustrated here, as the luxury goods sector makes headway while everyone else seems to worry about the rising cost of daily essentials.’
Burberry said sales before Christmas were 5 per cent higher than a year earlier as £723million of bags, hats, scarves, coats and other clothing flew off the shelves.
Full-price sales jumped 26 per cent reflecting its move away from offering discounts, and demand for leather goods was especially strong.
The fashion house also said profits for the year to April 3 would be 35 per cent higher than last year, well ahead of City expectations of £472million.
Finance chief Julie Brown said stores were attracting a new generation of customers, adding: ‘The brand is stronger, the product is stronger.
‘The key product categories, leather goods and outerwear, are performing very strongly.’
In Switzerland, Cartier-owner Richemont reported its fastest Christmas sales growth in more than a decade
Burberry shares rose 111p to 1866.5p. AJ Bell investment director Russ Mould said: ‘It appears the wealthy are lapping up luxury items.’
Burberry chairman Gerry Murphy said the boom would continue and its incoming chief executive Jonathan Akeroyd would inherit an ‘excellent’ position to build from.
Akeroyd will join in April, having run Versace since 2016 and could take home £11million in his first year.
His predecessor, Marco Gobbetti, the mastermind of the multi-year plan to reposition Burberry, jumped ship to Ferragamo this year.
Mould said: ‘Akeroyd will want to put his own stamp on the business, but he may want to consider an ‘if it ain’t broke don’t fix it’ approach given the progress under Gobbetti.’
In Switzerland, Richemont reported its fastest Christmas sales growth in more than a decade.
The firm, which is looking to give up control of fashion website Yoox Net-a-Porter, said sales in the three months to December 31 were 32 per cent higher than the same period a year earlier, at £4.7billion.
Jewellery sales jumped 38 per cent, fashion sales were up 37 per cent and watch sales rose by a quarter.