Burberry has reported a drop in revenues and profits over the last year as the luxury fashion brand lost sales in Hong Kong and Macau.The group warned that the luxury retail market would continue to struggle in the near term as it posted its preliminary results for the year ended March 31. Burberry’s shares fell 4pc to £10.98 in early trading.
The company announced a three-year plan to “reduce complexity and inefficiency” in an overhaul of its operating model that it is hoped will deliver at least £100m of cost savings.
Burberry’s pre-tax profit was down 10pc to £415m from the same period last year as it was forced to stomach falling demand in places like Hong Kong, where there was a sharp decline in footfall.
Sales were down 1pc from last year but up 3pc excluding Hong Kong and Macau, the company said. Total revenue of £2.5bn was 1pc less than the year before.
The group has increased its full dividend by 5pc to 37p.
Burberry now intends to “simplify processes” in an effort to capitalise on its digital presence and the planned relaunch of its website. It also plans to introduce a mobile app and invest further in the Asian market as part of its three-year plan to drive revenue growth and improve productivity.
Chief executive Christopher Bailey said: “While we expect the challenging environment for the luxury sector to continue in the near term, we are firmly committed to making the changes needed to drive Burberry’s future outperformance, underpinned by strong brand and business fundamentals.
“We continue to see significant opportunities ahead of us and have put ambitious plans in place to increase future revenue, enhance productivity and create a more efficient organisation.”
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