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Burberry’s new design chief gets off to a hot start

Reaction to Riccardo Tisci’s debut collection has been “exceptional” said Burberry, which is in the middle of repositioning itself as an ultra-luxury brand
burberry catwalk
Profits were slightly better than forecast

Burberry Group PLC (LON:BRBY) confirmed its full-year outlook as its repositioning under the direction of a new chief designer remains on track.

Earlier this year, the British fashion brand unveiled plans to become even more high end to try to take advantage of the surging wealth of the world’s rich and famous.

READ: Burberry share price ‘more realistic’, says HSBC

Riccardo Tisci succeeded Christopher Bailey as chief creative officer this summer and has already made his mark, redesigning the company’s logo.

His debut collection, Kingdom, recently launched in London and Burberry said the reaction has been “exceptional”.

Most of his new designs won’t be available in stores until next February, but a limited-edition selection of his first clothes and accessories sold out rapidly in China, a key market for luxury goods firms.

Excluding the beauty wholesale business which was sold off last October, revenue rose 3% to £1.22bn (H1 17: £1.19bn) in the six months to the end of September, in line with forecasts.

Adjusted operating profits dipped to £178mln (H1 17: £185mln), slightly better than expected, while margins remained steady at 14.6% (H1 17: 14.6%).

Cost savings on track

“We are energised by the early results as we begin to transform and reposition Burberry,” said chief executive Marco Gobbetti.

“The initial response from influencers, press, buyers and customers to our new creative vision and Riccardo's debut collection Kingdom has been exceptional.”

He added: “Mindful that we are only in the first phase of our multi-year plan, we continue to manage dynamically through the transition.”

As part of its repositioning, Burberry has also been implementing a cost-cutting drive, which it still expects to generate savings of £100mln this year and £120mln in 2020.

Shares rose 1.1% to 1,837p on Thursday morning.

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