Retail News Update

While many fashion retailers are feeling the squeeze, some are still thriving. Yesterday Hennes & Mauritz and Burberry, at opposite ends of the spending scale, each reported relatively robust sales.

H&M, the world’s third biggest fashion group, reported a 8% improvement in total June sales, while top-of-the-range Burberry unveiled first quarter revenues up nearly 25% on last year.

Analysts expected the Swedish group to be hit in Germany and Sweden, where clothes sales are down 11% to 12% on last year. H&M’s like-for-like sales, excluding new stores, were down 2%, but analysts had expected three times that.

Burberry also had an impressive performance. In its first quarter update, it revealed revenues up 22% driven by stores in New York, San Francisco and Chicago. Europe and Asia also performed well, led by France, Germany and Korea. The weak spot is Spain, where the brand had been strong, but shoppers now fight shy of the equivalent of £275 on a pair of ballet pumps; Burberry said like-for-like sales were down “double digits”. On orders so far, wholesale sales for the six months to end of September will be up 10% on 2007, though Spain is the weak link.

Burberry now has 97 stores around the world, 245 concessions, and 80 franchisees, including a new outlet in Baku, Azerbaijan. Angela Ahrendts, chief executive, said conditions were “challenging” – but the label’s Warrior bag, from £695 for a black leather version to £11,000 for a larger “luxury warrior” of alligator skin with brass studs, has been a bestseller.

Burberry shares, at 695p 12 months ago, added 2.5p to close at 399.5p