Burberry will focus on "Britishness" to eventually become a 5 billion pound business, new CEO Jonathan Akeroyd said, and will increase sales of accessories like higher-margin handbags and shoes to more than half its total.
Akeroyd, who joined the 166-year-old fashion house in April, said Burberry was the only luxury brand of scale that could lay claim to "Britishness", helping it stand out against French and Italian rivals.
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He said Burberry could grow accessories from a current 37% of sales to more than half in the longer term under new designer Daniel Lee, who had a "rare talent" for leather goods.
Burberry also had a big opportunity in footwear, including boots that harness the brand's history, he said. The company supplied Antarctic explorers such as Roald Amundsen and Ernest Shackleton. It would also grow its women's ready-to-wear and outerwear, such as its famous trenches.
Lee, who was appointed in September to replace Riccardo Tisci, created a buzz at Italy's Bottega Veneta with pillowy leather clutch handbags and slip-on heels.
"One of Daniel's unique talents is his product sensibility," Ackeroyd said. "He has a strong track record of creating best-sellers, particularly in accessories."
Lee's creativity had influenced a rainwear campaign that will debut in January, he said, before his first runway collection a month later.
Ackeroyd's predecessor Marco Gobbetti repositioned Burberry, known for its camel, red and black check, in a higher tier of luxury, introduced new products at higher prices, revamped stores and ended discounting.
The pandemic, however, thwarted the final stage of his plan to deliver strong top-line growth.
Thursday's half-year results showed recovery in Europe and improvement in mainland China, Burberry's biggest single market.
Quarterly comparable store sales rose 11%, a jump on its prior quarter and beating market forecasts. They lifted first-half revenue to 1.35 billion pounds ($1.61 billion), up 5% in constant exchange rates, while adjusted operating profit rose 6% to 238 million pounds.
Burberry kept near-term guidance to the end of its 2024 financial year of high-single digit revenue growth and a margin of around 20%.
Comparable store sales in mainland China fell 1% in the second quarter after falling 35% in the first, despite some local COVID lockdowns in September.
Europe performed strongly, with sales up 25% in the second quarter, boosted by a rise in tourists from the United States, the Middle East and locations in Asia outside mainland China.
Overseas visitors in destinations like Paris, London and Milan accounted for 40% of business. Prior to the pandemic that figure stood around 60%.
Chief Financial Officer Julie Brown said: "The big tourists going into EMEIA are essentially Americans and also the Middle Eastern nationalities."
The Chinese tourist was still absent, however, with around 97% of spending by Chinese customers happening in China.
The Americas continued to be a weak spot, with quarterly sales down 3% due to weaker demand for entry level items as well as U.S. customers spending in Europe rather than at home.
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