Burberry Sees Strong Holiday Returns, With Online Now Making Up 5% of Sales

Burberry is continuing to kill it in revenue, even at a time when luxury growth has slowed to a snail's pace.
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Dhani Mau
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Burberry is continuing to kill it in revenue, even at a time when luxury growth has slowed to a snail's pace.
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Burberry is continuing to kill it in sales, even at a time when luxury growth has slowed to a snail's pace. The British luxury goods company announced its results for October, November and December -- a challenging time for most retailers, except for Burberry, that is.

Revenue was up 14 percent to £528 million ($866 million) for the quarter, with comparable sales up 12 percent. That's impressive when you consider that as a whole, the luxury goods sector expanded only 2 percent in 2013, according to Bain & Company estimates. LVMH and Prada have both reported slowing sales.

Unsurprisingly, outerwear and leather goods were the cash cows. But what's more interesting is where these sales came from.

One place is retail (that is, sales made through Burberry's own stores, as opposed to department stores). The company said that despite weak traffic at Burberry boutiques, it outperformed by investing in customer service (including additional languages), in-store pickup and fulfillment. Those additional languages likely came in handy with one of Burberry's burgeoning customer bases: Chinese tourists. While demand for luxury goods is said to be slowing in China itself, that doesn't mean the Chinese aren't spending elsewhere. (In fact, Burberry has said previously that nearly a third of sales at its London flagship are made to Chinese tourists.)

And while Burberry is known for its success in digital marketing, its recent success isn't all due to e-commerce, though, online orders are continuing to increase, and contributed to the company's success in the holiday period. Burberry Chief Financial Officer Carol Fairweather said (via Bloomberg) that online accounts for “a little bit” more than 5 percent of sales, and that online growth was the result of Burberry bringing fulfillment in-house.

The news is proof that Ahrendts isn't slacking off in her last few months with the company before she joins Apple. It sounds like she's set on leaving on a high note, which will put even more pressure on incoming CEO Christopher Bailey to keep that momentum going. Given his killer Spring 2014 collection, which we want all of, we doubt that will be too much of a problem.