Burberry is joining a long list of peers backing away from animal-derived products.
In a Nutshell: The British luxury titan will no longer be using exotic skins, including leathers from alligators, crocodiles, pythons and ostriches.
“As a modern luxury brand, I am pleased to confirm today that we have banned the use of exotics in future collections, building on the commitments we made a number of years ago to go fur-free,” CEO Jonathan Akeroyd said in the earnings call.
The move puts Burberry among the exotics-eschewing ranks of designers such as Calvin Klein, Chanel, Jil Sander, Mulberry, Victoria Beckham and Vivienne Westwood, along with retailers like Farfetch, Moda Operandi and MyTheresa.
The U.K. arm of People for the Ethical Treatment of Animals (PETA) has taken credit for the tartan touter’s decision.
“During Burberry’s annual meeting last year, PETA U.K. asked when it would make good on its commitment to be a ‘force for good in the world’ by banning exotic skins, and we’re delighted that after years of pressure from PETA entities around the world, that day is today,” said vice president Mimi Bekhechi, who took the opportunity to slam the likes of Gucci, Louis Vuitton and Hermès for sticking to, or in some cases doubling down, on their role in the exotic wildlife trade, which some have blamed for introducing highly infectious diseases like Covid-19.
“The few irresponsible outliers still using exotics…are not just profiting from the exploitation and slaughter of animals but also playing Russian roulette with public health, given that experts—including the United Nations and the World Health Organization—have warned that the next pandemic could well come from the fashion industry,” she said. “The future of fashion is vegan, and those failing to embrace that will be hung out to dry like yesterday’s laundry.”
Meanwhile, Burberry reported profits for the year ended April 2 even though lockdowns in its largest market, China, hampered business in March.
“The company has laid out a clear, defined strategy to elevate the brand, product and customer experience to true luxury status, and has taken some challenging—but important—commercial actions to achieve this ambition, including a relentless focus on full price sales,” Akeroyd said during his first conference call to investors Wednesday. “At the same time, Burberry has continued to be a force for good, leading the industry in luxury’s transition to net zero and supporting communities in need. As CEO, I fully intend to build on these strong foundations as we focus on accelerating growth.”
Akeroyd, who joined the company two months ago, plans to keep the existing strategic plan in place, and plans to give “some color on enhancing the strategy” in November. For now, it’s “too early” to comment on mergers and acquisitions, as the CEO has “a lot of things to focus on in the coming months.”
Julie Brown, chief operating officer and chief financial officer, said Burberry is focused on boosting full-price business. In fact, full-price sales turned positive in the fourth quarter versus pre-pandemic levels.
“We saw strong performance in America where full price sales in the U.S. market have almost doubled, and in Mainland China and South Korea, they’re up more than 50 percent and 80 percent, respectively,” Brown said.
EMEIA (Europe, Middle East, India and Africa) sales suffered as a result of Covid travel restrictions, she said.
Burberry will continue to invest in outerwear and leather goods, where full-price sales grew 39 percent and 28 percent, respectively. Outerwear was driven by strong performance in jackets, quilts and downs, while ready-to-wear saw tops and bottoms continue to outperform. It will focus on elevating small leather goods going forward.
Burverry rolled out 47 new store concepts, with 65 slated for the current financial year. Over the past five years, the company opened 125 new stores and close 176 .
During the quarter, Burberry teamed with Supreme for an exclusive capsule that sold out on burberry.com within seconds, and held its first in-person runway show in two years for its Autumn-Winter 2022 collection celebrating British culture. The company also invested in localized marketing campaigns, which included popups and pop-ins as interactive spaces to amplify the advertising and inspire customers, Brown said.
Burverry “sees opportunity for selective price increases,” she added.
Net Sales: Revenue for the year rose 21 percent to 2.83 million pounds ($3.53 billion) from 2.344 million pounds ($2.93 billion). The current year ended was a 53-week reporting period versus last year’s 52 weeks.
Brown said retail has grown to 80 percent of overall sales, up from 77 percent. Retail comparable store sales rose 18 percent from last year and were up 6 percent on a two-year basis. Retail full price comp store sales rose 24 percent and were up 30 percent on the two-year comparison.
For the fourth quarter, comps were up 7 percent from a year ago, while full-price comps rose 5 percent. Covid-19 lockdowns in Mainland China impacted retail comps performance in March.
In wholesale, revenue fell 29 percent to 512 million pounds ($640 million) from 396 million pounds ($495 million), mostly due to the decision to exit non-luxury accounts.
Earnings: Operating profit was up 4 percent to 543 million pounds ($678.3 million), or diluted earnings per share (EPS) of 97.7 pence ($1.22), from 521 million pounds ($651.2 million), or 92.7 pence ($1.16).
Profits for the year after tax rose 5 percent to 396 million pounds ($495 million) from 376 million pounds ($470 million).
CEO’s Take: “The company has made great progress over the last five years to elevate the brand, product and customer experience into the luxury space. I look forward to setting out my plans for building on these strong foundations and accelerating growth at the interim results in November,” Akeroyd said.