On Tuesday, Burberry reported its sales numbers for the six months leading up to Sept. 30, and one significant event that took place at the tail end of that period was the brand's first-ever entirely "see now, buy now" men's and women's runway show.
Anecdotally, the British heritage label's shift to an instantly shoppable runway seemed successful. The Hollywood Reporter found that the brand's Regent Street flagship in London was filled with shoppers the following day, with many items seemingly selling out both there and on the brand's website. However, it sounds like inventory levels of the "see now, buy now" collection were pretty low to begin with, and during Tuesday's earnings webcast, the company's CFO Carol Fairweather confirmed that the strategy didn't have a big impact on the bottom line — not that they necessarily expected it to.
For one, she noted the runway collection typically only represents five percent of sales globally anyway. "I wouldn't say it had a meaningful impact on sales numbers in the [second] quarter," she said. "I do think we were really pleased with the response of the show through every dimension, be it brand reach, be it share of voice, magazine covers."
One particular item that debuted on the runway really seemed to take off: the Bridle Bag (pictured above), a satchel inspired by traditional British saddlery. Most versions retail for a not-insignificant $1,995 to $2,895, going up to $26,000 for a version made from alligator. Stocked in every single Burberry location globally, it was the best-selling item from the runway, and is now the brand's third best-selling handbag overall after the Rucksack and the Buckle Bag. Speaking of handbags, they outperformed sales of Burberry's signature trench coats in the first half of the year, though the brand expects outerwear sales to pick up in the (obviously colder) second half.
While Burberry didn't seem deterred by the lack of an impact from "see now, buy now," it could've used a sales boost: Including currency tailwinds, revenue for the first half of the year was up five percent; excluding those, revenue was down four percent, due largely to significant declines in licensing and wholesale revenue.
U.S. wholesale, thanks to our perennially doomed department stores, was especially "challenging" according to Fairweather, in part because orders were lower, and in part because of Burberry's strategy to reduce inventory in department stores in order to prevent them from putting excess inventory into "off-price channels," which would hurt brand perception. "We want to continue to elevate the brand in the U.S.," she said.
Sales in Burberry's own stores and website were up two percent excluding currency fluctuations, 11 percent with those factored in. Comp sales — meaning those in stores open at least a year — were down three percent in the first quarter, but up two percent in the second.
For the full year, Burberry expects retail sales to grow in the mid-single digits and wholesale to decline in the mid-teens as it continues to implement the simplification and streamlining initiatives it laid out back in May.
Homepage photo: Burberry September 2016 runway finale. Getty Images