British luxury fashion label Burberry reports a better-than-expected rise in second-quarter retail sales after tourists flocked to its London stores to take advantage of the weaker pound, boosting sales in its home market by 30 percent. As Hayley Platt reports, online retailer Asos has also benefitted from the weak pound.
Burberry has been one of the best performing stocks since Britain voted to leave the EU in June. But a drop off in sales at department stores hit first-half sales. And its share price. They fell 9 percent - retreating from 14-month highs last week. Still it wasn't all bad news - tourists took advantage of the weak pound, boosting Burberry's UK sales 30 percent. Year-on-year sales only managed a 2 percent rise. (SOUNDBITE) (English) CITY INDEX, RESEARCH DIRECTOR, KATHLEEN BROOKS, SAYING: "Burberry have said for example that they're going to see an extra 105 million on the back of this pound depreciation, that's really just considered just a one off event. They need to get their own house in order to really try to benefit from that." That job will fall to Celine's Marco Gobbetti who takes the helm next year. allowing the current CEO Christopher Bailey to concentrate on being Creative Director. At the other end of the fashion spectrum, online retailer ASOS has also been benefitting from the weak pound. Annual profits rose 37 percent, as consumers in the UK, US and Europe clicked on to buy. The British firm said its ability to react to a fickle fashion market fast.... and an expanding international client base will help keep sales on track even as the economy struggles. (SOUNDBITE) (English) CITY INDEX, RESEARCH DIRECTOR, KATHLEEN BROOKS, SAYING: "We think the economy is going to slow largely as a result in the decline in the pound but also because of investment. Usually when you've got a weaker currency it attracts a lot of foreign investment but unfortunately with Brexit uncertainty there are fears that that investment could slow down." There's unlikely to be an end to the uncertainty yet. Negotiations over Britain's divorce from the EU aren't due to start until March at the earliest.