Burberry watches boost licensing division

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Licensed products deliver stronger than expected performance.

Burberry has reported a “stronger than expected” performance in its licensing division, with watches selling particularly well.

The luxury brand said in a trading update that it now expects underlying licensing revenue to decline by a mid single-digit percentage, instead of a previously forecast drop of up to 10 percent.

Burberry revealed like-for-like retail sales up by more than 9 percent in its first half trading update and said that its figures have been bolstered by sales in emerging markets. It also reported a “material improvement” in gross margins.

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Over the second half of its financial year Burberry said it plans to increase its selling space by 25 percent, with 25 percent of this expansion focused on China. While the luxury brand has reported strong sales in China, the focus on the country is also being led by the company’s acquisition of its Chinese retail operations from its franchise partner last month.

Burberry chief executive Angela Ahrendts said: "The momentum at Burberry continues, with 21 percent revenue growth and a material improvement in the gross margin in the first half. While mindful of our strong second half last year, we currently expect adjusted profit before tax for the full year to be in the top half of market expectations. Continued product innovation, digital and customer service initiatives, coupled with the recent acquisition of our Chinese retail operations, underpin our confidence in delivering long-term sustainable growth."

Burberry watches are distributed in the UK by Fossil and are sold at a range of retailers including The Watch Hut, Harrods and Ernest Jones. 

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