Burberry has implemented a £50m efficiency drive designed to bring it out on the other side of the downturn in a stronger position.
The luxury group reports its full- year results next week. Adjusted profits before tax are expected to be in the middle of market expectations of between £162m and £185m.
Although Burberry’s retail sales improved in the quarter to March 31, when they rose 3 per cent like for like, Citi analyst Thomas Chauvet believes the luxury sector has yet to bottom out.
He said: “We remain concerned about Burberry’s geographical exposure, deriving 50 per cent of its retail/wholesale revenues from three highly leveraged markets – the US, Spain and the UK.
“And we do not view the product mix to be particularly favourable either – about 65 per cent apparel, potentially carrying higher fashion/inventory risk.”