UK Markets closed
  • NIKKEI 225

    -584.99 (-1.97%)

    +29.58 (+0.10%)

    -0.83 (-1.31%)

    +7.70 (+0.43%)
  • DOW

    -295.65 (-0.87%)

    +604.23 (+1.53%)
  • CMC Crypto 200

    +37.82 (+3.06%)
  • Nasdaq

    -142.56 (-1.02%)
  • ^FTAS

    -76.60 (-1.92%)

Burberry upgrades forecasts over strong Asian and US sales

  • Oops!
    Something went wrong.
    Please try again later.
Simon Neville, PA City Editor
·2-min read
  • Oops!
    Something went wrong.
    Please try again later.

Luxury fashion brand Burberry said sales are set to be higher than first thought as rich shoppers in Asia and the US increased spending on its products.

The company said sales in the three months to March 27 are now expected to jump between 28% and 32% compared with a year earlier.

Bosses have benefitted from stores being open again in China, South Korea and the US, even though sites across Europe remain shut due to Covid-19 restrictions.

Burberry has also been focusing on selling more products at full price, rather than with discounts, and more sales are now seeing customers spend the ticket price.

Russ Mould, investment director at AJ Bell, suggested wealthy customers who would typically travel to Europe to spend big in Burberry appear to be shopping in local Burberry stores instead.

Coronavirus – Thu Dec 3, 2020
Lockdowns across Europe have failed to dent Burberry’s sales (Victoria Jones/PA)

He said: “A lot of its business has historically come from Asian tourists taking trips across Europe. They like to spend big and its products are highly desirable.

“The restrictions on international travel are only in the nascent stages of being lifted and the return of tourist-related sales may not pick up in earnest until 2022.

“Therefore, current sales are likely to be driven by domestic customers. In January it flagged good full-price sales in places like the Americas, mainland China and Korea.

“As more regions start to come out of lockdown restrictions, there is a sense that we could see a huge spending spree as a lot of people fortunate to have been working throughout the pandemic may have amassed considerable spare cash.

“The idea that we could see the Roaring Twenties is very real and luxury goods companies such as Burberry could be major beneficiaries.”

In the UK, officials have estimated high and middle income households have been the biggest beneficiaries financially from the Covid-19 crisis, accumulating savings of £180 billion, with around £9 billion expected to be spent in the next year alone.