Handbags will carry Burberry to higher sales, says Bravo

Burberry is targeting the female passion for handbags and shoes in an attempt to increase its share of the high-margin accessories market.

Burberry is targeting the female passion for handbags and shoes in an attempt to increase its share of the high-margin accessories market.

Analysts estimate that the fashion house, which reported a sharp increase in profits yesterday, could raise the proportion of sales it makes from accessories to 35 per cent from 26 per cent.

Rose Marie Bravo, the chief executive, said the group intended to exploit the "emergence of the 'It' bag" as it seeks to "become more significant in handbags". She added: "The handbag is becoming the new shoe."

Sales of its accessories rose by 16 per cent last year, helped by the success of its new Shackle handbag, which features one of the fastenings from its original trenchcoat design.

Shoes, which account for less than 10 per cent of its total accessories business, are another area that the group intends to expand. "We are babies in this area but it could be a big business in five years," Ms Bravo said.

The group's underlying profits rose by 21 per cent to £141.2m on the back of strong sales of its core womenswear collections. The final dividend payment of 4.5p was 50 per cent up on the year before.

The group updated its trademark beige check in this season's hot fashion colour, pink.

It also embraced floral prints - this spring's top trend - plastering them all over its trenchcoats.

Ms Bravo said consumers had responded favourably to the "profusion of colour printed pattern ... after decades of black and beige", adding: "The wonderful thing about colour is people tend to buy more multiples."

Selling more full-price goods helped the group's gross margin to expand, boosting its bottom line. Growth was strong across all of its three distribution channels, with retail, wholesale and licensing all growing by strong double-digits.

Total wholesale sales rose by 14 per cent in the year to £351.4m, driven by a strong performance in the US and the emerging Chinese market. Licensing revenues finished the year 15 per cent higher at £67m, driven by royalty gains in Japan, while retail sales rose by 13 per cent to £257.4m, as sales picked up in London during the second half. Chinese tourists are aping the Japanese with their love of luxury brands and travel, Ms Bravo said.