Harry Potter star Emma Watson – the current face of Burberry – has lent some magic to the luxury fashion brand.

Burberry revealed yesterday that demand for its posh products remains robust, with retail sales up 12 per cent in its first quarter.

While total revenues fell 4 per cent in the three months to June 30, this was largely dragged down by a 28 per cent drop in wholesale sales.

Like-for-likes were flat, with strong sales in Britain and South Korea – helped by weaker currencies – offset by poorer performances from the US and Spain.

Finance director Stacey Cartwright said that the 153-year-old retailer – famed for its classic check – is taking market share in a tough market.

She also signalled that retailers are being more disciplined with promotions, in a sign that retailers are tightening their stock inventories and stability is returning to the market.

While Cartwright said it was too early to talk of a recovery, she said she was encouraged by the results and by the demand for Burberry’s newer categories – shoes, childrenswear, leather and denim.

Burberry is right to be bullish – the results are strong in a tough market and it is outperforming its peers. Its shares have risen by over 100 per cent in the last half-year.

However, as fears grow of another dip in the recession and forecasts abound of turbulent times in the economy at the end of the year, Burberry needs to ensure it remains in good shape.

Like all retailers, but luxury retailers in particular, Burberry needs to ensure that promotions are at a level that won’t damage the brand’s credentials as an exclusive luxury brand.

It must also continue streamlining and cutting costs. It has already slashed its workforce by around 15 per cent, equating to about 800 roles.

With unemployment at an all-time high and set to continue hitting the kinds of high-spend customers Burberry attracts, the retailer is by no means out of the woods yet, but it is going the right way to hold steady during the storm.