The organization said Thursday that it will reduce markdowns, a measure that may hurt second-half sales though should enhance long-term fertility. The stock rose as much as 5.8 percent after first-half sales declined less than expected and Burberry said revenue returned to increase in October.
Burberry intends to upgrade its leather-goods pricing into the levels enjoyed by competitions Prada and Gucci, according to Luca Solca, an analyst at Sanford C. Bernstein. Like Prada, Burberry continues to be attempting to find a stronger grip on its merchandise pricing by reducing sales to third party retailers to decrease stock on the market. The pandemic is putting the luxury-goods sector through one of its greatest disasters however, resulting in an 88 percent decrease in Burberry’s first-half earnings per share.
Wholesale revenue, which represents about a fifth of total sales, dropped 38 percent in the first half
Chief executive Marco Gobbetti place the company on a transformation strategy before the pandemic struck, wanting to increase the quality of its goods and woo millennials and younger shoppers. But Covid-19 heightened the need to change gears, together with the brand announcing in July it would combine its offerings around ready-to-wear, accessories and Suede Shoes since it cuts 500 jobs.
Burberry Functional Jacket shares have lost about a quarter of the value this year, the worst performers among leading European luxury-goods stocks.
While the recovery in China, South Korea and the US was evident with”powerful” double-digit increase rates in the quarter ending September, Europe and Japan notably”remain impacted by the substantial reduction in tourism”
Burberry has been active in attracting tech-savvy Chinese clients. It recently opened a shop in Shenzhen with Chinese net giant Tencent Holdings Ltd. that combines a physical and electronic experience.
There were renewed lockdowns in Europe’s fashion capitals. Burberry said it stays”conscious of this cloudy macro-economic environment” due to the virus and now over 10 percent of its stores which are closed globally following recent lockdowns, it said.