Burberry’s pre-tax profits slipped after what the luxury fashion business dubbed “a year of transition”.

The high-end retailer and brand reported pre-tax profit fell 5% to £395m during the year ending March 31.

Adjusted profit before tax was up £42m to £462m, although that represented a 21% slump on an underlying basis, as the business took “strategic actions to elevate the brand.”

Burberry said it made “key appointments” across its product, customer experience and technology operations and delivered £20m of cost savings during the year as part of its strategy.

Despite those actions, group revenue slipped 2% on an underlying basis to £2.8bn.

Burberry’s retail sales, which accounted for 77% of that total, advanced 3% on an underlying basis and 1% in like-for-like terms.

Revenues from its wholesale business slumped 14% while licensing sales plummeted 48%.

“Fast-changing market’

Burberry chief creative and chief executive officer Christopher Bailey said: “2017 was a year of transition for Burberry in a fast changing luxury market.

“The actions we have taken to lay the foundations for future growth are yielding early benefits and I remain confident that these will build over time.”

Bailey will be succeeded as chief executive by Marco Gobbetti in July, although he will stay with the business as chief creative officer – a role he has held since 2004.

Bailey said of Gobbetti’s impending arrival: “With his extensive experience in the sector, we will build on these foundations to elevate and strengthen the brand further and take Burberry to the next level as a global luxury retail and digital business.

“I am excited to work closely with him in this next chapter.”