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)


Saudi minister Al-Falih says Aramco IPO likely in 2019

Updated 25 May 2018
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Saudi minister Al-Falih says Aramco IPO likely in 2019

  • Energy Minister Khalid Al-Falih: “We are ready, the company (Saudi Aramco) essentially has ticked all the boxes. We’re simply waiting for a market readiness for the IPO.”
  • Khalid Al-Falih: “Most likely it will be in 2019 but we will not know until the announcement has been made. All I could say is stay tuned.”

RIYADH: Saudi Arabia is most likely to hold the initial public offering (IPO) of oil giant Aramco in 2019, Energy Minister Khalid Al-Falih said on Friday, confirming a delay from the initial plan to list the company this year.

“The timing I think will depend on the readiness of the market, rather than the readiness of the company or the readiness of Saudi Arabia,” Khalid Al-Falih, who’s also the company’s chairman, said at the St. Petersburg International Economic Forum in Russia on Friday.

“We are ready, the company essentially has ticked all the boxes,” he said. “We’re simply waiting for a market readiness for the IPO.”

For almost two years, Saudi officials said the IPO was “on track, on time” for the second half of 2018. But for the first time in March they suggested it could be delayed until 2019.

“Most likely it will be in 2019 but we will not know until the announcement has been made,” Al-Falih said. “All I could say is stay tuned.”

The Aramco IPO would be a once-in-a-generation event for financial markets. Saudi officials said they hope to raise a record $100 billion by selling a 5 percent stake, valuing the company at more than $2 trillion and dwarfing the $25 billion raised by Chinese retailer Alibaba Group Holding Ltd. in 2014.