Burberry fashions ‘excellent’ results

Burberry fashions ‘excellent’ results

Fashion group Burberry has reported a rise in profits and said it should meet market forecasts next year despite tough trading conditions.

In its first set of results since it floated on the London stock market, it unveiled pre tax profits of 109.4m, up from 84.8m the previous year.

Burberry made its debut on the stock market last July after the retail to business services group GUS which remains Burberry’s majority shareholder floated a minority stake in the firm.

The firm has come up against challenging conditions with global demand for luxury goods hit by the economic slowdown, while the war in Iraq and Sars virus have hit the Asian tourist market.

However, the Sars virus has had a limited impact on Burberry as much of its Asian revenue comes from Japan, which has not been hit by the bug.

Underlying retail sales at the group grew by 25% over the year to the end of March, with sales of accessories such as handbags and luggage particularly strong.

“This has been a remarkable year for Burberry,” said chairman John Peace.

“We began life as a public company in July 2002 with the successful completion of our IPO [flotation] during very difficult stock market conditions.

“And we have ended the year with an excellent set of financial results, well ahead of market expectations at the time of the IPO.”

After allowing for one off costs relating to its flotation, Burberry’s profits were 85.1m.

Burberry said that since March its retail results had been “impacted by external events” and although underlying revenue was still growing, “comparable store performance has been modestly negative”.

Despite what it described as “exceptional short term uncertainty” it said it still expected to meet analysts’ expectations for the current financial year.

Fashion house plans Rs 14 cr IPO

Fashion house plans Rs 14 cr IPO

Supplier of accessories and home furnishings to Armani and some other big names in the world of fashion, Crew B O S, will raise about Rs 14 crore (Rs 140 million) through an initial public offer to fund expansion and move to the next growth orbit.

“We have been doing well since our inception in 1998 but for increasing our rate of growth we need more funds. Of the Rs 14 crore we plan to raise, more that Rs 13 crore will go for capacity expansion at our three plants in Gurgaon near Delhi and the rest for our foray into retailing,” Crew B O S Products Ltd managing director Tarun Oberoi told newsmen in New Delhi.

“For the last two years there has been a lot of demand from India for accessories. Till now we have grown through internal accruals and debt but for the next level of growth we need to bring in more equity,” he said.

The company has a debt equity ratio of 0.15 to 1 and it will go down further after the IPO, one of the company’s promoters and director Puneet Nikore said.

As part of the public offer, which opens on August 19 and closes on August 27, the company will issue 40,00,724 fresh equity shares of Rs 10 face value at a premium of Rs 25.

Post public issue, the paid up equity capital of the company will increase to Rs 11 crore (Rs 110 million) from Rs 7 crore at present and share of the three promoters of the company will come down by 32 per cent.

At present, Crew primarily ships products to the US and Europe. The US accounts for 60 per cent of its exports and the company has set up a wholly owned subsidiary in Italy ‘La Tatva’ as part of its strategy to evolve as a global player.

Crew started exporting fashion footwear during 2003 04.

The company had revenues of Rs 56 crore (Rs 560 million) and net profit of Rs 4.4 crore (Rs 44 million) in 2003 04, a massive increase from Rs 12.5 crore (Rs 125 milion) topline and Rs 1.3 crore (Rs 13 million) bottomline five years back.

Though accessories are not governed by Multi Fibre Agreement that comes to an end on December 31, 2004 the company sees a positive impact on its prospects after the phasing out of quotas in textile trade.

“Many big buyers of textiles are looking at an alternative to China for supplies and their obvious choice is India. Once buyers of textiles see the quality of Indian products they may also like to source fashion assessories from here,” Oberoi said.

Out of the company’s three manufacturing units, two are export oriented and its operations entail three business divisions, fashion bags and wallets division, home furnishing and products division, and belt and fashion footwear division.

For retail venture, Crew will adopt a franchise model. “The company will own just one store that will come up in Gurgaon. For opening franshise stores we already have enquiries from Mumbai and Bangalore,” he said. Republication or redistribution of PTI content, including by framing or similar means, is expressly prohibited without the prior written consent.