China lockdowns dampen Burberry’s growth despite investment in customer engagement, says GlobalData – Retail Times


Following today’s release of Burberry’s figures for Q1, FY2022/23; Pippa Stephens, apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Despite investing considerably in growing its customer base through various high-profile celebrity partnerships, community initiatives and a product refresh to appeal to younger shoppers, Burberry recorded subdued growth of £26m to £505m in Q1 FY2022/23 – just 1.4% above pre-pandemic Q1 FY2019/20 levels, following a rebound of 10% during FY2021/22. The main inhibitor of growth was the lockdowns in China, which caused comparable sales in mainland China to decline by 35% on the year, though this should start to improve in Q2 now restrictions have mostly been lifted.

“After being the worst performing region in FY2021/22, due to a lack of tourism, EMEIA experienced the strongest comparable sales growth of 47%, after Burberry sensibly shifted its focus to target more local customers, however, this will still fall short of a full recovery, as the comparative period saw sales in the region still 38% behind pre-pandemic levels. Burberry’s reliance on EMEIA, particularly the UK, has been a main factor in it consistently underperforming other luxury players like LVMH and Kering since the pandemic, and though Burberry’s affluent shoppers will be less impacted by the cost-of-living crisis, this region is experiencing some of the strongest inflation rates, making Burberry more vulnerable than its more global rivals.

“Burberry’s new product ranges have proved popular among consumers, with particularly strong reactions to its leather goods and outerwear, with comparable sales outside of mainland China for these offers growing by 21% and 19% respectively in Q1 FY2022/23. While it has been modernising its collections to attract new customers, it still incorporates many of its distinctive design elements and plays into its British heritage, particularly appealing to shoppers based outside its home market.

“With the metaverse becoming an integral part of many consumers’ lives, particularly among the younger shoppers which Burberry is aiming to attract, the brand has been taking full advantage of this to extend its revenue streams and build engagement. In April, it launched a virtual collection on gaming platform Roblox to promote its latest Lola handbag range, and in June it announced that it will partner with Blankos Block Party on a NFT collection for a second consecutive year. While these platforms will still only be a marginal source of revenue for Burberry, ongoing technological advancements will enhance their commercial opportunities in the future, so it is sensible for Burberry to establish its position as a frontrunner in the digital space early on.”





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Following today’s release of Burberry’s figures for Q1, FY2022/23; Pippa Stephens, apparel analyst at GlobalData, a leading data and analytics company, offers her view: “Despite investing considerably in growing its customer base through various high-profile celebrity partnerships, community initiatives and a product refresh to appeal to younger shoppers, Burberry recorded subdued growth of £26m to…