Luxury goods group Burberry continues to defy recession

Burberry today shrugged off the global economic slow down and reported that the well dressed and well to do continue to flock to its stores.

In the first half of the year it saw sales up 30% to £830 million, a result that was better than City analysts had been expecting and which left recent sellers of the stock with possible cause for regret.

The shares have been hammered in the last few weeks as traders bet that even the rich would rein in spending in the face of a looming recession.
Instead its handbags and clothes, in particular the traditional Burberry trench coat kept finding fans.

Today the stock rallied 31p to 1294p, down from more than 1600p not so long ago.

Chief financial officer Stacey Cartwright was sanguine about the share price.

"I can't comment on the market," she said. "They are looking at macro indicators, all we can do is pop up every quarter and say how we are doing."

That overcoat is one of the few items still made in Britain at a factory in Yorkshire. "We have more than doubled the workforce," said Cartwright. "We are proud of it."

Like for like sales, which strip out the effect of new store space, are up 16% in the second quarter. Cartwright reckons there's a band of wealthy globe trotters that seek out Burberry kit wherever they are.

"The global luxury traveller has become more important over the past few years," she said.

"There is a growing population of consumers that are coming into the luxury space. They shop locally and they shop when they travel."

China now accounts for 10% of the sales from 53 stores. The company intends to take that to 100 over the next five years.

Freddie George at Seymour Pierce said: "Burberry's long term growth story remains intact."

The company is valued at £5.5 billion.