Burberry hopes to make a comeback thanks to its reopening in China

Luxury retailer Burberry can prove its shoppers are sheltered from cost-of-living pressures when it announces full-year financial results on Thursday.

The historic British brand, which benefited from China’s economic reopening this year, is expected to show a jump in profits and sales for the year ending in March.

The forecasts come despite a number of retailers flagging consumer demand for a slump as cost pressures squeeze household budgets.

Burberry, known for its trench coats and plaid cashmere scarves, has been hit hard by lockdown restrictions in mainland China, its biggest market.

The world’s second-largest economy only started to ease its strict zero-Covid policy significantly at the end of last year, to the relief of global investors and businesses.

Sales declined by nearly a quarter in the region in its third financial quarter, dragging down its total sales figure driven by strong demand in Europe, the Middle East and Africa.

But investors will hope the return of buyers in Asia will boost earnings in its final quarter.

Burberry, along with other designer brands such as French handbag maker Hermes, have proven that wealthy shoppers haven’t cut back on big ticket purchases despite soaring inflation.

Hermes said its sales jumped a quarter in the first three months this year, helped by a resurgence of buyers in China and tourists in Britain and Italy.

Luis Vuitton owner LVMH reported a 17 percent jump in sales last month amid a rebound in China’s luxury goods market.

Burberry says accessories such as bags, scarves and belts, as well as its famous trench coat, are selling well in its latest update.

It counts high-profile figures such as Tottenham Hotspur striker Son Heung-min and singers Shakira and Burna Boy among the faces of its campaign.

Susannah Streeter, head of money and markets at Hargreaves Lansdown, said Burberry customers have a rich layer of protection against inflation.

He said: The return of high-spending Chinese tourists to domestic shops but also international outlets is long overdue and signs of a weaker-than-expected rebound are unlikely to be well received.

While the expected slowdown in key markets may not bode well for other mid-range clothing brands, Burberryscore customers do have a rich layer of protection against inflationary pressures.

Instead, keeping the brand in the favor of demanding fashionistas is far more important and while the upgrade effort doesn’t come cheap, the creative focus is paying off.

Burberry’s all-important leather bags and coats have sold well, a trend that will be watched closely for signs of tension.

The company is expected to report group revenue of 3.1 billion for the full year, up from 2.8 billion a year earlier, according to a consensus drawn up by analysts.

It is also expected to report an operating profit of 640 million, up from 530 million last year.

Burberry’s share price neared an all-time high earlier this year as investors cashed in on the lucrative company.

The Anna Wise Press Association