Stores reopening fuels sales rebound from watches to bags

Bloomberg

Shoppers rushing back to stores after the lifting of lockdowns boosted European brands selling everything from watches to sneakers to handbags.
Richemont, the owner of Cartier and Van Cleef & Arpels, reported a more than doubling in first-quarter revenue, while sales at Burberry Group Plc topped estimates.
The results show consumers are hungry for luxury goods as they emerge from pandemic restrictions and vaccination campaigns accelerate.
Sneaker-maker Puma SE raised its full-year sales guidance, further evidence consumers are back and spending.
Richemont shares jumped as much as 2.2% in Switzerland and Puma rose 2.6% in Frankfurt. Burberry declined in early London trading.
Burberry said it benefited from strong demand by younger customers in key categories such as leather goods and outerwear. The company said it’s also seeing full-price sales growth accelerating.
Under Chief Executive Officer Marco Gobbetti, who last month announced plans to leave at the end of the year, Burberry has striven to make its trenchcoats and handbags more exclusive with fewer markdowns and fewer sales through third-party outlets.
Burberry is also developing its leather goods offering, a crucial category that’s shown resilience during the pandemic at rival brands Louis Vuitton and Hermes. During the last quarter, Burberry launched the Olympia bag, which was promoted by star influencer Kendall Jenner and musician FKA Twigs.
The company also said it now expects wholesale revenue — generated by third-party distribution channels — will increase by around 60% in the period through the end of September thanks to a strong order book. It maintained guidance for “high single digit top line growth and meaningful margin improvement” in the medium-term.
Burberry’s strategy, which had begun to yield results,
has been thrown into question by Gobbetti’s decision to decamp to Italy’s Salvatore Ferragamo SpA, itself seeking a turnaround.