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It’s time for Retail Brew’s weekly fashion dispatch. This week, one luxury British retailer saw a dramatic drop in sales, and a fashion industry veteran sold her eponymous label.
Burberry sales drop
Burberry revealed its latest sales results, reporting a whopping 34% decline in annual profit as sales dropped 12% in the final quarter of 2023. The British luxury retailer attributed the disappointing results to underperformance in regions like China, where sales were down 19%, and the absence of tax-free shoppers in London. “Spending by Chinese tourists at our stores in London is less than half of what it was compared to the pre-pandemic, whereas it’s more than tripled in Paris,” CEO Jonathan Akeroyd said in a statement.
Why this matters: Declining sales seems to be the song of the season for luxury retailers. With the exception of LVMH (see below), even huge conglomerates like Kering are struggling as major brands like Gucci and YSL see a drop in consumer spending.
MyTheresa sales grow
While many retailers are trying to figure out ways to sustain consumer interest, German luxury retailer Mytheresa reported a 17.6% uptick in net sales. Sales grew to 233 million euros in its third quarter of fiscal year 2024 that ended on March 31. The retailer credited substantial demand in the US market for its growth, among other factors.
Why this matters: Some luxury brands have managed to become outliers in the industry, while others grapple with declining sales amid inflation. One such prominent outlier is LVMH, which continues to perform well, offering hope for the sector. More recently, retailers like Prada notched 16% growth in sales.
Roksanda sells her label
London-based independent luxury designer Roksanda Ilinčić has bid adieu to her eponymous label. The Serbian-born designer sold the brand, which was founded in 2006, to Hong Kong-based The Brand Group but will continue on as creative director.
Why this matters: Illinčić blamed “recent volatile conditions” for the decision to sell. The move comes as many independent luxury brands in the UK seem to have hit troubled waters after the recent closure of MatchesFashion.com that housed many popular independent fashion companies.