Burberry Group PLC (LSE:BRBY) shares were given a double boost ahead of its interim results which will be posted, when a strategy update is also expected from new boss Jonathan Akeroyd.
The British upmarket fashion retailer was seen in a better light by investors following positive results from luxury peer Richemont.
Additionally, the FTSE 100-listed group and its peers are seen as receiving a boost from easing lockdown measures in China.
According to analysts at Barclays, Akeroyd's strategic review is expected to see the focus on "brand elevation" to continue and they don’t anticipate any drastic changes.
"On the other hand, we would expect the new CEO to assume more flexibility on how to execute the strategy, and we also hope for an update on the future of the current creative director Ricardo Tisci, hired by the previous CEO."
There have been reports in the fashion press that talks have been held with other designers in light of Tisci’s contract ending in 2023.
As for the China angle, Victoria Scholar, analyst at Interactive Investor, noted the removal of some Covid lockdown measures, with Burberry having previously warned about sales in China, reporting a 35% drop in revenue in the region in the 13 weeks to 2 July due to the restrictions.
Global sales grew 5% when last reported, held back by “significant disruption from lockdowns in mainland China.”
Barclays expect first-half sales of £1.3bn, with second-quarter retail sales of £525mln, implying an 8% year-on-year growth in the quarter at constant currencies, on the back of improving trends in Mainland China and even stronger growth outside Asia.
During times of economic downturn, luxury goods retailers usually end up relatively unscathed, given their target market is often immune to cost-of-living crisis’s.
Despite this, Alex Smith, a senior analyst for luxury goods at Third bridge said Burberry “is more exposed than some other luxury brands.”