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)


Ryanair inks new deals with unions in Europe

Updated 6 min ago
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Ryanair inks new deals with unions in Europe

  • Ryanair pilots across Europe staged a 24-hour stoppage in September to push their demands also for better pay and conditions
LONDON: Ryanair has inked deals with more unions across Europe, the Irish no-frills airline said Friday as it looks to avoid further strike action threatened by pilots and cabin crew.
“These signed agreements with our pilot unions in Portugal, the UK, Italy and shortly in Spain, demonstrate the considerable progress we’re making in concluding union agreements with our people in our major EU markets,” Ryanair’s head of human resources Eddie Wilson said in a company statement.
But the latest agreements are only a stepping stone toward the key demand of Ryanair staff outside Ireland that the airline stop employing them under Irish legislation.
Employees argue that the status quo creates huge insecurity for them, blocking access to state benefits in their own countries.
Ryanair’s statement came one day after Belgian unions representing the airline’s cabin crew threatened “several strike days before the end of the year” by Europe-wide employees.
Ryanair pilots across Europe staged a 24-hour stoppage in September to push their demands also for better pay and conditions, plunging tens of thousands of passengers into transport chaos at the peak of the busy summer season.
In July meanwhile, strikes by cockpit and cabin crew disrupted 600 flights in Belgium, Ireland, Italy, Portugal and Spain, affecting 100,000 travelers.
Earlier this month, Ryanair slashed its profits forecast and signaled job losses in the Netherlands and Germany as it reported on the fallout of the pan-European strikes.
An update on its earnings outlook and past performance is due Monday when Ryanair publishes half-year results.