Julienna Law
Jul 19, 2021

Burberry sales rebound after Chinese boycotts

The Xinjiang cotton controversy in March hasn’t slowed Burberry down, with sales in the Chinese market shooting past pre-pandemic levels by 55%.

(Burberry's Weibo)
(Burberry's Weibo)

Despite coming under fire in China for its stance against Xinjiang cotton—losing two of its star ambassadors and a much-anticipated Honor of Kings partnership in the process—Burberry has emerged relatively unscathed.

On July 16, the British luxury house stated that the issue had “relatively limited impact” on the business, with sales in the mainland actually surpassing pre-pandemic levels by over 55% in the three months to June 26. This strong performance not only boosted sales in Asia by 27% but also helped overall retail revenue jump 86% to $662 million year-over-year. 

However, China can’t take all the credit. With markets around the world finally coming out of lockdown, the group’s comparable store sales rose 90%. Notably, the Americas saw full-price sales leap an impressive 341% vs 2020 and 34% vs 2019. Meanwhile, EMEIA sales increased 146% compared to the year prior, although they were still down 38% from 2019, as stores continued to be affected by lockdowns and the lack of international tourists.

As CEO Marco Gobbetti summarised, “We have made an excellent start to the new fiscal year. Full-price sales accelerated as our collections and campaigns attracted new, younger luxury customers to the brand.”

To win over these younger shoppers, Burberry ramped up its brand activities over the first quarter. This included the launch of a campaign centered around its new handbag shape, the Olympia, which featured mega-influencer Kendall Jenner and generated an “excellent response” on social media. The leather goods maker also joined hands with local Chinese artists to further promote the bag, creating four installation pieces as part of its ongoing Burberry Generation content series in the country.

Burberry collaborated with four Chinese artists to bring its Olympia bag to life. Photo: Burberry’s Little Red Book

Online, Burberry engaged consumers with the launch of its Handbag Hub on its website as well as partnership with Mythical Games, through which it will release its first NFTs later this month. Thanks to these digitally-savvy efforts, full-priced sales to new customers grew over 30% compared to 2019, showing that the 165-year-old group has still got it.

That said, Burberry’s future remains unclear. Just two weeks ago, Gobbetti announced that he would be departing the brand to lead rival Salvatore Ferragamo at the end of the year. The sudden news caused share prices to tumble and raised concerns that designer Riccardo Tisci, who was hired by Gobbetti in 2019, would follow out the door. Although the brand assures that they are “very, very confident” the creative director will stay put, uncertainty about senior management has put a damper on investor sentiment. 

So, while Burberry has managed to navigate lockdowns and cotton controversies, it’s clearly not out of the trenches just yet. 

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