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Luxury fashion house Burberry has declared its turnaround strategy is proving effective, reporting robust growth in North America and China, despite European spending facing pressure amid the Middle East conflict.

Chief executive Joshua Schulman expressed satisfaction with the brand’s first-quarter progress, as it continues to advance its “Burberry Forward” initiative, launched in late 2024.

This strategy involves a renewed focus on British heritage and a revised pricing approach, moving away from some of its ultra-luxury lines.

The London-listed firm reported that retail revenues climbed 5 per cent to £455 million for the 13 weeks to June 27, compared with a year earlier.

This growth was further supported by a 1 per cent increase linked to positive currency exchange rates.

The recent positive performance was underpinned by a significant 12 per cent growth in its Americas business, alongside a 9 per cent rise in greater China.

China had a particular boost from local shoppers and strong demand from Gen Z customers, the brand said.

Elsewhere in Asia, the business highlighted an 11 per cent increase in South Korea, linked to both local and tourist spending, but this was partly offset by a 2 per cent decline in Japan.

In Europe, the Middle East and Africa, the group reported a 3 per cent drop in sales, highlighting a drag from the Iran war and weaker tourist spending.

The retail business said local trade had boosted sales across its flagship stores in London, as the conflict continued to dent demand from international visitors.

Mr Schulman also reiterated pleas from the group for Andy Burnham, who is due to become the new leader of the Labour Party later on Friday, to look at reintroducing a VAT-free scheme for tourists.

Rishi Sunak scrapped the scheme in 2021, which Burberry linked to a roughly 50 per cent drop in tourist demand in its stores since before the Covid-19 pandemic.

Burberry said recent sales growth was also supported by strong demand for raincoats, jackets and scarves, with outerwear sales up by double digits.

Mr Schulman, chief executive of Burberry, said: “For the first time in three years, we saw growth across our womenswear, menswear, accessories and childrenswear divisions, anchored by the outperformance of outerwear.

“Our strategy is working.

“We are attracting a broad range of luxury customers across product categories, channels and geographies, reinforcing my confidence in the opportunities ahead.”

Adam Vettese, market analyst for Etoro, said: “Burberry shares opened lower this morning after the release of its first quarter trading update, as investors weighed steady but unspectacular progress in the group’s turnaround.

“The update showed further sequential improvement in comparable store sales, extending the momentum seen in the six months to March.

“However, the market had hoped for clearer evidence of accelerating momentum or more bullish commentary on the outlook.”