Wholesale
Wholesale sales accounted for approximately 28 percent of total reported revenue in the quarter.
In the period, total wholesale sales increased 2 percent on an underlying basis, and declined 3 percent reported. The majority of autumn/winter product shipments are concentrated in the second quarter of each financial year. Burberry continues to anticipate a low single digit percentage underlying increase in first half wholesale sales relative to the previous year. On a reported basis, the Spain retail conversion will result in a shift of sales from Burberry's wholesale channel to its retail channel in the first half.
In conjunction with a local partner, the Group opened a net one franchise store in China during the quarter.
Licensing
Total licence revenue in the quarter increased 11 percent on both an underlying and reported basis. In Japan, licence revenue achieved a solid underlying gain reflecting modest volume growth and increases in certain royalty rates.
Burberry continues to expect a moderate underlying revenue decline in Japan for the full financial year as a result of licence transitions and other ongoing efforts to enhance brand positioning in this market. Strong growth in product licence revenue was led by fragrances, which benefited from the successful launch of Burberry London for women during spring 2006. Burberry London for men is scheduled to launch in autumn 2006.
Burberry is a luxury brand with a distinctive British sensibility, strong international recognition and differentiating brand values that resonate across a multi-generational and dual-gender audience. It designs and sources apparel and accessories distributing through a diversified network of retail, wholesale and licensing channels worldwide.
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