Fashion Wire Daily - Paris - Burberry announced Tuesday, Nov. 17, that profit slumped 24 percent for the first half of the current financial year, blaming weaker international wholesale sales and the closure of underperforming stores.
Burberry, using its latest formula to express profit, announced that "attributable profit" fell to 56.8 million pounds, or $95.3 million at current exchange rates, for the six months that ended Sept. 30, 2009.
Sales advanced in the same period to 572.4 million pounds, or $960 million, a 6 percent rise on the like period in 2008, according to interim figures released in London.
Due to the weaker profit performance, the company's earnings per share fell by 11 percent, but Burberry nonetheless upped its interim dividend by 4 percent to 3.50 pounds, or $5.88.
In an address streamed on the company's website, Burberry CEO Angela Ahrendts trumpeted the fact that "comp sales," or comparable store sales - a measurement used by analysts to rate the productivity of a retail business - had risen 2 percent in the last half.
She noted that Burberry closed six under-performing stores in the last year, but opened 23 new boutiques in the same period. "Our franchise partners opened seven stores in China and we believe there is scope for 100 stores in China in the medium term," she said.
Despite completing the construction of a huge new Thames River headquarters, the London-based group also ends the half with net cash of 56 million pounds, or $94 million, an impressive result compared to one year ago when it suffered from net indebtedness of 114 million pounds, or $191 million.
Ahrendts said that "digital commerce, although small, outpaced all other categories," ending the half up 50 percent.
Ahrendts stressed that the company had deliberately been "recruiting executives whose mother tongue is digital," pointing to the house's new artofthetrench.com website that opened last week. Moreover, Burberry is putting a major push behind its outerwear, especially "as there is less fashion risk," she added.
