The luxury goods group Burberry eliminated the dispute over purchasing cotton in China, reporting that sales in one of its most important markets increased by 55%, surpassing pre-pandemic levels.
Fearing human rights violations, the British-based retailer encountered strong opposition in China after an international boycott of cotton grown in Xinjiang Province, and many Western retailers soon tried to distance themselves from this situation. Burberry relies on mainland sales because travel restrictions caused by the coronavirus have kept the Chinese middle class at home.
Burberry said on Friday that its activities in China were “relatively small” from the controversy, which prompted a brand ambassador to exit the retailer and sparked opposition from a video game. CFO Julie Brown said: “We just reported that full-price sales there increased by 55%, driven by the new young customers discovering the brand.”
However, sales in Europe and the United Kingdom fell by “over 40%” in the first quarter, partly due to a shortage of tourists due to the pandemic. The London-listed group said on Friday that in regions where many affluent tourists come from, such as Russia and the Middle East, their numbers have grown by “double digits.”
However, group sales rebounded to pre-pandemic levels, and in the 13 weeks ending June 26, compared with the outbreak of the Covid-19 crisis in the same period last year, group sales increased by 90% to 475 million pounds.
“We have seen a strong recovery [the first quarter] Although the environment continues to be challenging, comparable store sales are now in line with pre-Covid-19 transactions,” Burberry said, referring to the lack of international travel.
CEO Marco Gobbetti said last month that he will leave the company in five years to join its Italian rival Salvatore Ferragamo, which has prompted investors to worry that his efforts to bring youth and charm to the brand will lose momentum.
Recent successes in this area include a marketing campaign with social media celebrity Kendall Jenner, who helped promote Burberry’s Olympia bag to young audiences.