Commenting on the trading results, Rose Marie Bravo, Chief Executive, stated, #'Building on first half success, Burberry continued to achieve strong results in the second half of 2003/04. In particular, the outstanding response to our womenswear designs and use of colour throughout the product lines was a key catalyst across the business. This performance is consistent with expectations for the financial year.�''
Total revenues
Total revenues in the six months to March 2004 increased by 15% on an underlying* basis (i.e. at constant exchange rates), 13% reported, compared to the same period last year.
Retail
Underlying retail sales in the second half increased by 12% (7% reported), driven primarily by contributions from newly opened stores complemented by modest gains at existing stores. In addition to the four Burberry stores opened in the third quarter, the Group opened a new store in Houston, Texas and an expanded store in Manhasset, New York during the fourth quarter. Total net selling space increased by approximately 12% in the financial year.
Retail growth accelerated in the fourth quarter, with sales increasing by 14% underlying relative to an 11% gain in the third quarter. Regional market performance was directionally consistent with third quarter trends. The US market achieved vigorous growth. Continental European markets continued to gain momentum while UK trends improved later in the quarter. In Asia, Korea continued to be adversely affected by the volatile macro environment. Hong Kong demonstrated ongoing strength, while Southeast Asia, boosted by new stores, achieved solid gains.
Wholesale
Total wholesale sales increased by 16% on an underlying basis, 17% reported, during the second half driven by strong sales growth for the Spring/Summer 2004 season. By region, growth was led by the US market complemented by gains in Europe, modest growth in Spain and expansion in Asia's younger markets. Other emerging markets also contributed to this increase. Through a local partner, the Group opened the first Burberry store in Russia (Moscow) in February.
Licensing
Total licensing revenues in the second half increased by 21% on an underlying basis, 17% reported. Licensing revenues from the Japanese market reflected increases in certain royalty rates and a reduction in management fees payable with respect to specific licences. Volumes were in line with the previous year. In early April, the Group's partners in Japan opened a Burberry store featuring the brand's Prorsum and London collections in Tokyo's Omotesando district. Licensing revenue increases were also driven by outstanding sales gains at global product licensees, particularly fragrances, which continued to benefit from the highly successful Burberry Brit launch.