Chinese shoppers in fashion

Burberry's revenue is up 27 per cent. Photo / Glenn Jeffrey

Burberry, the luxury fashion brand, has boasted that its annual profits will be at the top end of expectations after China helped it deliver a barnstorming performance in Asia.

The group, which has six standalone British stores, as well as a handful of concessions in Selfridges, Harrods and Harvey Nichols, posted a 27 per cent leap in total revenues to £480 million ($992 million) for the three months to December 31.

Burberry chief executive Angela Ahrendts said its revenue growth was driven by "strong, consistent growth in both retail and wholesales and in every product division and region".

Its buoyant update follows that by Richemont, the world's largest jewellery maker, which on Monday said its third-quarter sales jumped by 33 per cent.

Burberry expects adjusted pre-tax profits for this financial year to come in at the top end of City forecasts of between £254 million and £291 million.

Burberry's strongest revenue growth of 68 per cent to £150 million came in Asia Pacific, boosted by China where the fashion brand acquired 50 franchise stores last September. Stacey Cartwright, the finance director of Burberry, said: "The underlying market in China is doing very well."

But she said Burberry had helped itself with improvements, such as adding more product inventory into the recently acquired stores.

Like-for-like sales at these Chinese shops soared by more than 30 per cent. Excluding these outlets in China, Burberry grew underlying sales by 14 per cent globally.

Cartwright said Britain was "one of the strongest performing" markets, lifted by continuing growth of overseas visitors to London, where most of its shops and concessions are located.

"It was very much driven by the luxury customers coming in from abroad," she said. While the Chinese were the biggest spenders in its British shops, they were closely followed by visitors from Russia, the Middle East and Continental Europe.

Globally, Burberry said it had benefited from strong demand across its product range including Prorsum trench coats, shoes, small leather goods and men's accessories.

In menswear, it cited strong demand for "man bags", which sell for between £295 and £895.

Retail sales surged by 40 per cent to £335 million over the quarter, while wholesale revenues rose by 15 per cent to £112 million.

Excluding China, which transferred to retail after the store acquisitions, wholesales revenues jumped by 35 per cent.

In the second half, Burberry plans to add 25 per cent of new space. Of this, about 15 per cent will come in China

Licensing revenues, the smallest part of Burberry's operation, fell by 11 per cent to £23 million, hit by planned terminations of licences in menswear and Japanese non-apparel.

- INDEPENDENT