Burberry is stepping up spending on new stores and upgrading existing outlets to cash in on a boom in spending on luxury goods, it said today, as it met forecasts with a 39 per cent rise in annual profit.

The British maker of raincoats and handbags said it would invest £180-200 million in the year ending March 2012 on accelerating new openings and revamping shops in major cities including London, Chicago and Hong Kong.

That is up from £108 million in the year just ended.

The 155-year-old group said it made profit before tax and one-off items of £298 million in the year to March 31st, boosted by strong demand from Chinese shoppers and tourists.

It increased the full-year dividend 43 per cent to 20 pence a share.

Reuters