Burberry bags profit rise ahead of Tisci design era

A display of products for sale in a Burberry store (AFP)
Updated 16 May 2018
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Burberry bags profit rise ahead of Tisci design era

  • Burberry reported a 2% rise in adjusted operating profit of 467 million pounds for the year to end-March
  • Tisci’s designs will be key to Gobbetti’s strategy to reinvigorate Burberry, where sales have lagged rivals

LONDON: Burberry beat profit forecasts on Wednesday as a strategy to re-energise its luxury brand showed early promise ahead of the arrival of its new designer Riccardo Tisci.
The former Givenchy star was appointed in March, replacing Burberry’s creative chief Christopher Bailey, who had turned the trench coat maker into a global brand.
Burberry’s chief executive Marco Gobbetti is repositioning the quintessentially British fashion house in a higher luxury segment and Tisci’s first collection will be shown in September.
“With Riccardo Tisci now on board and a strong leadership team in place, we are excited about the year ahead and remain fully focused on our strategy to deliver long-term sustainable value,” Gobbetti said.
Burberry reported a 2 percent rise in adjusted operating profit of 467 million pounds for the year to end-March. Its shares, which have risen 18 percent since Tisci was appointed, were trading up 3.5 percent at 1,867 pence at 0816 GMT.
“While the task of transforming Burberry is still before us, the first steps we implemented to re-energise our brand are showing promising early signs,” Gobbetti added.
The CEO set out a plan in November to catch up with faster growing luxury goods rivals, but he said there would be little, if any, growth in revenue and operating profit until its 2021 financial year as the program was implemented.
Tisci’s designs will be key to Gobbetti’s strategy to reinvigorate Burberry, where sales have lagged rivals.
The company reported group revenue of 2.73 billion pounds ($3.7 billion), down 1 percent, although comparable same store sales rose 3 percent, in line with market forecasts.
Bailey’s final runway show, which had a youthful streetwear focus, had been well received, Chief Financial Officer Julie Brown told reporters, with high demand for an edited capsule range of the collection available immediately.
Burberry’s new Belt Bags, which retail at 1,590 pounds, were also proving popular, she said.
Gobbetti wants to increase sales of Burberry’s leather goods, and the company agreed to take over the Italian leather goods supplier that makes the Belt Bag earlier this month.
Burberry said it had traded in line with its guidance since the start of its financial year on April 1.
Analysts were expecting the company to report adjusted operating profit of 453 million pounds, according to a company-provided consensus of 19 analyst forecasts. ($1 = 0.7401 pounds)


Philippine government to suspend excise taxes on petroleum products if oil hits $80

Updated 1 min 34 sec ago
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Philippine government to suspend excise taxes on petroleum products if oil hits $80

DUBAI: The Philippine government will suspend the collection of excise taxes on petroleum products if global crude oil prices hit $80 a barrel to soften its impact on Filipino consumers, a presidential spokesperson said Tuesday.
The announcement comes after oil companies on Tuesday implemented their biggest price hike for gasoline products so far this year of 1.6 pesos per liter ($0.03), and prices of diesel and kerosene products up by about 1 peso a liter, with what they claimed was to reflect ‘movements in the international oil market.’
“Excise taxes will be suspended when prices, If I am not mistaken, reach $80 [per barrel]. We are ready when to suspend the collection when oil prices reach that level,” presidential spokesperson Harry L. Roque said during a press briefing.
“The collection will be suspended,” he said, as part of contingencies to protect the public from a possible oil-price shock.
The new duties on fuel – and other items such as cars, tobacco and sugary drinks – are part of the Tax Reform for Acceleration and Inclusion (TRAIN) law which took effect at the start of the year.
The first tranche of the Philippine government’s tax restructuring has been blamed for the rise in consumer prices, which rose 4.5 percent in April and breached the year’s target of between 2 percent and 4 percent.
Finance Secretary Carlos Dominguez, however, said the roughly two-thirds of the April inflation rate was due to the demands of a rapidly-expanding economy, with the TRAIN accounting for only 0.4 point of the increase instead of the estimated 0.7 point.
“We will coordinate with the Department of Finance and the Department of Budget and Management if the benefits [for poor families] aside from the P200 monthly subsidy [as part of the amelioration program] have been released,” Roque said. “There are still other benefits to be given to soften the effects of TRAIN.”