International luxury company and Designer clothing brand the Burberry Group plc (LSE: BRBY) released an update on its trading performance for the first half. Across the Group total sales in the first half declined by 5%, Retail sales increased by 14%, while wholesale revenue declined by 23%.
The increased retail revenues were driven by both the European and Asian operations where Burberry attained ‘double digit’ revenue growth. However in the United States particularly the group’s performance continues to be negative. According to Burberry revenue growth in the United States and Spain remains 10% lower than last year.
Burberry’s wholesale revenue was down 23%, which was inline with earlier guidance given in April 2009. Reducing retail inventories among in all regions attributed to 13% of the decline, while the remaining 10% was a result of Burberry’s own actions and store closures. In the second half underlying wholesale revenues are expected to be down about 15%.
Whilst some operations have declined Burberry has also looked to expand its retail base in selected areas, including the addition of seven franchise stores in China. Going forward the group also intend to increase it average retail selling space in the full year by up 10%.
Going forward across the Group, Burberry is expecting to benefit from an amendment to the Japanese apparel licence. The trading environment in the US is anticipated to show ‘relative strength’ in the second half.
Burberry CEO, Angela Ahrendts commented on the group’s performance in the first half;
"Having completed a strong second quarter, Burberry delivered a solid first half revenue performance. During the period, we achieved further strategic progress ... In this uncertain environment, the team at Burberry remains focused on executing to capitalise on all available opportunities."