Burberry will update on trading on 15 January 2008 when it will issue its Interim Management Statement in respect of the Third Quarter.
Burberry continued to make considerable operational progress throughout the organisation in the first six months of the year, while delivering 19% underlying growth in revenue and adjusted operating profit.
This growth continues to be driven by strong product designs, our cohesive and compelling marketing campaigns, the monthly flow of new products as a result of the revised calendar and the introduction of a basic replenishment programme.
Accessories grew by 35% on an underlying basis in the first half to reach 31% of retail and wholesale revenue. Currently, luxury handbags in our European and US retail stores account for 50-60% of all handbag sales compared to less than 40% a year ago, and less than 5% some 18 months ago. This move to luxury is increasing the average price point of our handbags by over 25%.
The United States remains a key target market for Burberry. In the first half, sales grew by 29% on an underlying basis, with over 20% growth in retail and 40% growth in wholesale.
Emerging markets grew strongly from a small base, with a further six franchise stores opened in the half, in locations such as Mexico City, Istanbul and Rostov on Don in Russia.
Pursuing operational excellence: In addition to implementing our new IT platform (SAP), Burberry continues to evolve its global supply chain and logistics functions.
During the first half, we further upgraded our supplier base, using some larger, more vertically integrated vendors. We also opened new distribution facilities in the US and the Netherlands to support growth of the business and started to move to direct deliveries of apparel from suppliers in order to reduce cycle times.
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