Burberry shares jump as turnaround puts trench coat back in fashion

Burberry's shares have surged following the British fashion house's return to profitability, driven by renewed demand for its iconic trench coat. The FTSE 100 group reported a £19m pre-tax profit in the six months to the end of September, marking a significant turnaround from a £48m loss at the same period last year, as revenue grew by six percent to £1.1bn. Shares in the group have risen by seven percent in early trading to £1,166.

Burberry's chief executive, Joshua Schulman, has been focused on restoring the brand's presence in the mid-market by lowering prices and enhancing the visibility of its well-known trench coats since his appointment in 2024. The fashion house revealed on Thursday that sales of its outerwear products grew by double digits during the period, driven largely by demand for its rainwear.

Burberry highlighted "particularly strong growth" in sales of its tropical gabardine, a variation of the legendary trench coat sold at around £1,795.

The company also experienced robust demand for its cropped trench coats during the summer months. Schulman's strategy includes making Burberry more accessible through pricing, such as the lower-priced cropped trench coats. Prior to his leadership, Burberry briefly ventured into ultra-high fashion, leading to falling sales due to aggressive price increases alienating many consumers.

Schulman has also aimed to boost Burberry's sales in China, a vital market that had declined before his appointment. Sales in Greater China rose by nine percent in the first quarter of Burberry's financial year, though this growth has since slowed to five percent. To counteract this, Burberry has tapped into the popularity of the Cotswolds among wealthy Americans, releasing a new handbag line named after the region, some selling for over £2,000.

Leather goods sales have also accelerated due to the rising demand for the Cotswolds and vintage-check handbags.

Schulman expressed confidence in Burberry's strategy after achieving five consecutive quarters of growth and improved sales quality, stating that the brand and business are stronger than ever.