Romeo Beckham boosts Burberry sales

Romeo Beckham Burberry

Trench coat advert featuring David and Victoria Beckham’s son helps plug gap in sales caused by democracy protests in key Hong Kong market

Romeo Beckham helped Burberry beat forecasts for Christmas sales and make up for falling revenues in Hong Kong caused by pro-democracy demonstrations.

In a trading update, the luxury fashion house said retail revenue for the three months to the end of December rose 14% to £604m, beating City expectations. Group sales comparable with a year earlier rose 8%.

Sales rose by 10% or more in the US and Europe, the Middle East, India and Africa, spurred by the successful relaunch of Burberry’s traditional trench coat.

The campaign was supported by an advertisement featuring the 12-year-old son of David and Victoria Beckham that drew almost 9m views on YouTube. Romeo, described as “the fashion one” of the Beckham children by his former footballer father, has appeared in three Burberry campaigns.

Analysts had expected retail revenues for the third quarter of Burberry’s financial year to reach £579m. Romeo’s appearance in the festive promo, which played on Burberry’s London roots, helped drive strong sales in the Americas, where the Beckhams are well known after David’s stint with the LA Galaxy team.

Business was less buoyant in Asia, where Burberry was hit by falling sales in Hong Kong after tens of thousands of people took part in pro-democracy street protests.

Sales in Asia rose by a low single-digit percentage, reflecting a slight fall in Hong Kong revenues, which make up about 10% of global sales. Hong Kong police cleared the last pro-democracy site in mid-December after two months of disruption by demonstrators angry at Beijing’s encroachment of civil liberties.

The slowdown in Hong Kong, a high-margin market, more than offset a more muted impact from exchange rates, which the company said in November could strain profit margins.

Finance director Carol Fairweather declined to comment on whether trading had picked up in Hong Kong since the end of the protests.

Burberry’s shares fell 1% to £16.48. The shares have been affected by concerns about the economies of China and other emerging markets where Burberry has expanded to sell its goods to well-off consumers.

Retail revenue for the three months to the end of December rose 14% to £604m.

Fairweather said business in mainland China and South Korea was solid despite slightly weaker sales to Chinese customers.

“We are saying China remains robust. We are still posting mid-to-high single-digit growth. We know the external environment remains challenging so we are very focused on outperforming whatever the [industry] trends end up being.”

Powered by article was written by Sean Farrell, for The Guardian on Wednesday 14th January 2015 15.10 Europe/London © Guardian News and Media Limited 2010