Burberry credits marketing for pushing revenues past £1bn for first time

Burberry is crediting increased investment in marketing and ‘brand momentum’ with helping push 6-month revenues past the £1bn mark for the first time as it prepares for CEO Angela Ahrendts’ departure to Apple next year.

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Burberry’s Christmas marketing campaign

In the six months to 30 September, revenues were up 17 per cent compared with the same period a year ago to £1.031bn, up from £883m a year ago. Pre-tax profits were almost flat, rising from £173m to £174m, better than expected at the start of the year and reflecting costs associated with bringing its beauty business in-house.

The financial update is the first since it was announced CEO Angel Ahrendts would be leaving to join Apple and will be replaced by chief creative officer Christopher Bailey. Speaking on a conference call with analysts, she said Burberry is focused on executing its festive marketing strategy, which is based on the theme Burberry with love, to boost sales over the Christmas quarter.

In a statement Ahrendts added: “The first half performance reflects the continuing strength of our global brand momentum. We remain focused on executing our retail, digital and marketing strategies in the all-important third quarter and in what remains an uncertain macro environment.”

Ahrendts said digital continues to be a key point of difference for Burberry compared to its competitors. In-store iPads now account for 30 per cent of its online business and it has click-and-collect services in more than 80 locations globally.

It is continuing to lean towards digital for its marketing. For example it collaborated with Google for Burberry Kisses, which allowed users to capture and send a kiss, and Apple to film its Spring Summer 2014 runway show.

Outerwear also remains at the core of its marketing activity and beauty is being integrated into brand promotions following its decision to take control of the business. Burberry announced its biggest fragrance launch to date in September, with a global marketing campaign inspired by British music.

Bailey is due to take over the chief executive role in the middle of next year, but says it is “business as usual” at the brand with a continued focus on its positioning in “Britishness” and speaking to the next generation of consumers via digital. The firm is creating a new chief design officer role that will set the creative direction and vision of the brand.

“We have taken back control of licensing and the brand, the result of which is we have built a company with a distinctive and consistent point of view that defines Burberry today. There is still fuel in the tank,” said Bailey.

Meanwhile, TopShop, BHS and Dorothy Perkins owner Arcadia has posted a 2.7 per cent drop in sales for the year to 31 August from stores opened before the start of its financial year.  The drop in sales drove operating profit down to £225.2m, from £220.9m in the previous financial year.
 
The company said it was trying to mitigate “challenging trading conditions” by “engaging our customer across multi-channels”.
 
Topshop, for example, partnered with mobile sound app Chirp for London Fashion Week in September to create an app that let users quickly share information with other people in the same place via a ‘chirp’ sound. 
 
TopShop recently appointed Sheena Sauvaire to the chief marketing officer role, following the departure of Justin Cooke who has left to form his own agency.article  Sauvaire  is responsible for enhancing its multi-channel offer.

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