Burberry profit drops amidst difficult luxury surroundings

Following on its high-profile Christmas campaign featuring 12-year-old Romeo Beckham, British Luxury Fashion house Burberry reported on Wednesday a drop in its half-year profit. The company said that its demand for luxury goods in Asia fell significantly in recent months and had not really improved due to currency fluctuations but that it doesn’t expect any further material impact in the second half if exchange rates remain at current levels.

The adverse impact of exchange rate movements lowered revenue by 69 million pounds and profit by 25 million pounds the company reported. Despite the company's adjusted pre-tax profit rising 6% to $241 million, its pretax profit for the period declined 11 % to $226.6 million, compared to GBP 159.0 million,a year earlier.

At a presentation in London Christopher Bailey, Chief Creative and Chief Executive Officer, said, “Looking ahead, in a more difficult external environment, we continue to focus on the things that we can control. Through authentic products, great customer experiences and a culture of continuous improvement and innovation, we remain confident of Burberry's sustained outperformance.”

Burberry Group shares rose 0.79% to close at $48.48 yesterday. The company plans to spend roughly 200 million pounds in fiscal 2015, with about two-thirds going to retail projects.