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Burberry boosts investment as luxury sales booms

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Burberry boosts investment as luxury sales booms

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Britain’s Burberry plans to increase its spending on opening new shops and upgrading its existing stores.

It will invest the equivalent of up to 230 million euros this financial year, responding to a strong recovery in demand for luxury goods, led by Chinese shoppers and tourists.

Burberry’s full year profit jumped 39 percent to 343 million euros.

Chief Executive Angela Ahrendts said the investment would limit growth in profit margins in the coming year but she was sure the spending would pay back.

“It is time to get our retail footprint up to par with consumers’ perception of the brand,” she told reporters, adding Burberry had spent the last five years improving the “back end” of the business, like its supply chain and technology.

The global luxury goods market has continued last year’s strong recovery, defying fears it might be hit by austerity measures in Europe and steps to cool fast-growing emerging market economies.

Earlier this month US consultancy Bain raised its 2011 growth forecast for global luxury sales to eight percent from a previous estimate of between three and five percent.