British luxury brand Burberry has reported faster than expected sales growth in its financial first quarter but as Melanie Ralph reports plans to give the new CEO a large bonus aren't going down well with shareholders.
Burberry's merchandise is iconic and still very much in fashion. The British luxury brand reported a strong 370 million pound retail revenue for the first quarter beating analysts forecasts. Sales growth was also up 12 percent, beating rivals Louis Vuitton and Gucci - who failed to top 5%. But there was a warning future profits could be hurt by sterling's strength - possibly by as much as 55 million pounds. PTC In general luxury brands have ridden the recession out quite well, and Burberry is no exception. For many retailers exchange rate pressures do weigh on the outlook for some. For Burberry, it's the chief executives pay that's really rattling shareholders at the moment. Christopher Bailey only took the helm in May from Angela Ahrendts (a-rents) who quit to join Apple - but he's alredy in line for a big payout. Some reports suggest his total deal could be over 20 million pounds. His personal allowance alone is said to be in the region of 440 thousand pounds a year, that's 1200 pounds a day. Now it will be up to Burberry chiefs to convince shareholders that Bailey - who's also the creative director - deserves the pay boost. Certainly the new CEO will be keen to prove himself, and Burberry's large leap into online could help. Anusha Couttigane is Senior fashion Consultant with Conlumio SOUNDBITE (English) ANUSHA COUTTIGANE, SENIOR FASHION CONSULTANT, CONLUMINO, SAYING: "Burberry is quite different compared to some of its rivals in the way that it's gone online. Luxury labels like to maintain their exclusivity, they're a little more hesitant about going online, they perceive it as democratisation of a brand, whereas Burberry it's about the sales and they're using online to get their sales, so its working for them." Expansion into make-up is also giving Burberry a boost - it's expecting beauty revenue to rise twenty five percent this year, showing new strategies are working. But that may not be enough to shift the shareholders' focus from the CEO's pay packet.