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Burberry Sales Up 13%, With Beauty Solid In Its First Year Out

With CEO Angela Ahrendts heading to Apple next month, the fashion house is doing just fine.

Angela Ahrendts is leaving Burberry in a good state as she prepares to move over to Apple next month to head up its retail operations. Burberry reports that sales are up 13 percent in the last six months, good growth as Ahrendts hands off the chief executive reins to designer Christopher Bailey. 

Having opened a (very) shiny new Shanghai flagship store this week, the company is continuing to invest in real estate. That may well include more standalone beauty stores, the first of which Burberry opened in Covent Garden in December.

Burberry launched its beauty division in April of last year after announcing in October of 2012 that it would be taking that business in-house and terminating its licensing contracts, a buyback that cost the company £82.9 million. It was a bold move: Although most luxury brands have fragrance lines, most are developed and sold by outside companies like Interparfums, with whom Burberry worked. Beauty can be tough territory for a fashion brand — the supply chains are totally different and thus difficult to manage — and Dior and Chanel are among the lone few that operate their own beauty businesses.

The Covent Garden beauty store has done well, the company reports, with beauty wholesale revenue reaching £93m in the last six months. That's consistent with the brand's guidance: In October, Burberry projected that beauty wholesale would hit £140m for the full year, having brought in £51m in revenue for the six months prior to that.

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The real question is how the company will look in six months time, when Bailey has taken over Ahrendts's title. The designer will undoubtedly have a strong support system as CEO, but he's got a tough act to follow.