By Scott Kanowsky
Investing.com -- Burberry Group PLC (LON:BRBY) has said it will refocus the fashion house's products on its British design heritage, as chief executive officer Jonathan Akeroyd lays out his eagerly awaited plans to expand sales to £5 billion in the long term.
In an interim trading statement on Thursday, the London-based brand famous for its high-end trench coats said it wants to strengthen its connection with "Britishness" under new chief creative officer Daniel Lee, who took over from Italian Riccardo Tisci in October.
"Burberry has an extraordinary legacy, a unique British heritage and a very strong platform to build on [...]," said Akeroyd, who replaced prior CEO Marco Gobbetti in March. "Our focus in this next phase is on growth and acceleration."
Burberry is hoping this shift will help double sales of leather goods, shoes, and women's ready-to-wear outerwear by around 50% in the medium term, while simultaneously growing sales of accessories by more than 50% in the long term.
Burberry targeted a doubling in e-commerce revenue to around 15% of all retail demand, as well as a boost in in-store sales densities by over 50% to £25,000 per square meter.
Total medium-term group-wide sales are now expected to increase to £4B at constant exchange rates, "sustaining high-single digit growth with operating leverage ensuring good margin progression."
Burberry backed its financial guidance up to its 2024 fiscal year but warned that it is "mindful" of the macroeconomic challenges, especially from strict COVID-19 rules in China disruption operations in its key mainland China market, and recessionary risks in Europe and the Americas.
Meanwhile, the company reported an 11% rise in comparable store sales in the second quarter, beating analyst estimates, despite pressure from continued COVID-19 lockdowns in China.
In the first half, adjusted operating profit jumped by 21% to £238M, above forecasts, on revenue of just under £1.35B.
London-listed shares in Burberry edged slightly lower in early trading.