Burberry Mainland Sales Doubled North American Cold

According to the world clothing shoes and hats net, Britain

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On Wednesday, the key financial figures for the second half of fiscal year 2016/2017 were released, although sales grew by 14% over the same period last year, but excluding the exchange rate, sales fell by 1%.

In the second half of the fiscal year, the Burberry group has performed well in the Asia Pacific region and Europe, especially the recovery of China's luxury market has greatly promoted the sales of the group. The downturn in sterling exchange rate since the United Kingdom has helped the Burberry group to perform well in the two aspects of native consumption and tourism consumption in the UK.

But in addition to mainland China, Burberry group's performance in Hongkong and South Korea is not satisfactory, while the continued downturn in North American department stores has seriously affected the sales performance of Burberry in North America.

On Tuesday, the British Prime Minister, Theresa May, announced that the general election would be held ahead of schedule, which led to a sharp rise in the pound's exchange rate and a further increase in the prospects of the Burberry group.

The stock price is high, can the new CEO turn the tide?

After releasing financial data, Burberry group's share price fell to 5.9% from 17.1 pounds per share in the after hours trading on Wednesday.

Despite the unsatisfactory performance of the Burberry group in the past year, their share price has risen all the way, with a year-round increase of 25% and a 19 P / E ratio.

Although this data is slightly below the average of the Bloomberg Intelligence luxury index, Bloomberg analysts believe that with the sterling exchange rate plummeting, sales incentives for the Burberry group have gradually subsided. At the same time, compared with other luxury giants such as LVMH and Kering (Kai Yun), Burberry is more difficult to profit from the recovery of the Chinese market, so their current share price is already high.

Burberry group's current CEO and creative director Christopher Bailey will officially resign from CEO in July this year. His successor is French luxury group.

Its brand C e line brand's former CEO Marco Gobbetti.

In addition, Bailey will continue to retain the position of his creative director, and he will become president of the brand, and will focus on design and creative work after he has discharged his heavy responsibilities.

Marco Gobbetti will be under great pressure.

Analysts believe that in order to make the performance of Burberry group match their stock price, Gobbetti has to introduce more excellent products besides improving its efficiency and reducing costs.

At present, Burberry group has tried a new design style on leather goods and other products, with remarkable results. But because Christopher Bailey will continue to be the creative director, many people worry that Burberry can not make enough bold innovation in design.

At present, Burberry group is the largest luxury group in the luxury industry, with a net annual cash flow of 660 million.

The sharp drop in sterling rate caused by Britain's departure from Europe will be a double-edged sword for the Burberry group.

Although the low exchange rate has greatly promoted their sales in the UK, if overseas capital wants to buy Burberry group, the difficulty will be greatly reduced.

In December last year, the US luxury brand Coach, once offered a bid to Burberry group, but was rejected by the latter.

If Gobbetti can not succeed in bringing Burberry Burberry out of trouble after taking office, it is not entirely impossible for the takeover of the company to be acquired.

Wholesale channel performance downturn

In the second half of the 2016/2017 fiscal year ending March 31st, the key financial data of Burberry group are as follows:

Sales of 1 billion 607 million pounds, up 14% from the same year, fell 1% at the same exchange rate.

Retail sales amounted to 1 billion 270 million pounds, an increase of 19% over the same period last year. Retail sales rose by 3% over the same period, which is 3% higher than that of store sales.

Wholesale sales amounted to 327 million, down 1% from the same period last year, down 13% at the constant exchange rate.

Authorized business sales amounted to 12 million pounds, a year-on-year decline of 38% over the same exchange rate.

The main reason for this decline is the expiration of the authorized operation agreement in Japan.

The growth of digital channels is better than other channels, among which mobile terminals are the main driving force for growth, an increase of 50% over the same period.

The sales volume of mainland China's e-commerce outlets has nearly doubled.

In the fourth quarter, Burberry group's comparable store sales increased by 2% over the same period last year, less than 5% of analysts' expectations, while also lower than the third quarter's 4%.

Burberry stressed that it will not continue to expand the retail network, but will focus on improving the efficiency of existing stores.

The main reason for the decline in wholesale channel sales is that Burberry group has adjusted the wholesale business of several markets in the current fiscal year, reducing the size of wholesale sales channels.

Burberry Group expects that the wholesale sales in the first half of 2017/2018 will fall in the median figure. If the effect of the beauty line is not considered, the wholesale sales in the first half of this year will be flat compared with the same period last year.

Major adjustment of beauty product line

In terms of constant exchange rate, sales of beauty products in Burberry group fell by 20% over the same period last year.

At the beginning of this month, the Burberry group reached an authorization agreement with the US beauty giant Coty group. It agreed to authorize the perfume and beauty makeup business to Coty for 160 million dollars. The agreement still needs the approval of the relevant departments. If there is no accident, it will come into effect in October this year.

As part of the strategy, the Burberry group has begun to substantially reduce the sale of beauty products in key markets such as the UK.

In the second half of the year, the sale of beauty products in Britain dropped from 3000 to 35.

In the conference call, Brown said that the Burberry group's adjustment to the beauty business will affect about 100 jobs, not 200 previously announced.

"Some employees will still work in Burberry group, but some will be pferred to Coty," she said.

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Digital channel is the focus of future development

Like many luxury brands, Burberry group also faces the problem of excessive retail network.

Burberry said that it will slow down the expansion of the retail network and try to improve the efficiency of existing stores.

To achieve this goal, Burberry group will continue to develop digital business.

The group's new CFO and COO Julie Brown said: "at present, 70% of our consumer purchase decisions are affected by various digital channels."

Brown pointed out that the company's survey data show that before buying, consumers will be able to access Burberry related sites 8 times through various digital channels.

In addition to regular online sales, Burberry group is also trying other digital marketing methods. Their fashion show in February was first broadcast live on social media Instagram.

The strategy worked well. Compared to the September fashion show, sales of fashion show in February increased by 25%, and the number of spectators increased by 50%.

Brown also mentioned that the Burberry group will combine more digitalization with personalized services in the future.

The Burberry private group has expanded by 50% and its training is also improving.

Under their efforts, the average customer's average shopping volume is twice as large as that of ordinary customers.

Asia and Europe are doing well, and the US market is under pressure.

The Burberry group's performance in major markets is as follows:

Sales in the Asia Pacific region stood at 659 million, an increase of 19% compared with the same period last year, with an increase of 1% at the constant exchange rate.

Sales in Europe, the Middle East and Africa were 536 million, up 16% compared to the same period last year, increasing by 5% at the constant exchange rate.

Sales in the Americas market stood at 400 million, an increase of 7% over the same period, and a 10% decline at the constant exchange rate.

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