The Tisci cure is working, Burberry says thank you: the first quarter is ok (+ 4%)

Tisci cure is good for Burberry. The British brand closed its first quarter of the fiscal year 2019/2020 on June 29th with a 4% increase in revenues (+2% at constant exchange rates) for a turnover of 498 million pounds. Meanwhile, sales at comparable stores are up by 4%, thanks to the new products designed by Riccardo Tisci.

Product category trends
Clothing has grown by a double-digit percentage. The sale of accessories has decreased, but the new styles have recovered the “softer” performance of the lines of previous collections. Especially in terms of geography, China, as well as the United Kingdom, recorded satisfactory results.

Word to the CEO, Marco Gobbetti
“This was a good quarter in our multi-year journey to transform Burberry – is the comment in a note by Marco Gobbetti, CEO of Burberry -. We have increased the availability of products designed by Riccardo Tisci, while continuing to shift consumer perceptions about our brand and align our network with our new creative vision. Consumer response has been very promising, offering strong growth to our new collections. We are in line with our plans and we confirm our forecasts for fiscal year 2020”. What are the plans? Reaching a substantially stable turnover as well as the operating margin which will include savings for 120 million pounds.

The Tisci cure
The first phase of Burberry’s multi-year strategy is to revitalise the brand, align distribution and create new product offerings. The company added that there was an excellent consumer response to Riccardo Tisci’s product with new collections, providing a double-digit percentage growth compared to the equivalent collections of the previous year, in line with expectations. (Mv)

Quotation prices
On Tuesday, July 16, the value of Burberry shares rose by 14%. Quarterly data exceeded analysts’ estimates, prompting the market to think positively. Comparable sales grew 4% while analysts expected half of it. A result to which tourists who have taken advantage of a weak pound during their visit to London have contributed.

Leather accessories
Countypress reports the same comment by Brown on the fact that sale of accessories has decreased (the only flaw in Burberry quarterly report): “We are building the architecture of bags” said the manager. The British brand, as all other brands are doing, tries to attract younger customers. The company is experimenting with the monthly launch of products on platforms such as and one of these “drops” has been particularly successful: black leather tear-off sleeves priced 170 pounds sold out in 20 minutes.

Analysts’ opinion
GlobalData analyst Chloe Collins tells the Guardian that the transformation desired by CEO Gobbetti is bearing its fruits, but credit must also be given to creative director Riccardo Tisci, as his collections offer a “fresh and decisive renewal to classic and neutral brand designs”. Citi analyst Thomas Chauvet said: “It remains to be seen whether the commercial success of the new Burberry brand identity can be sustained for the rest of the year, when the number of products designed by Tisci will increase on the shelves, reaching a much higher share in the offer”.

 

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