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Q4 like-for-like sales slump 12%, China down 19%

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Annual operating profit falls 34%

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Groups says it will focus on British classic

(Writes throughout with detail on company's plans to focus on

classics, CEO and analyst quotes)

By Suban Abdulla and Paul Sandle

LONDON, May 15 (Reuters) - Burberry ( BBRYF ) said on

Wednesday it would increase its focus on classic designs like

trench coats after a sharp fall in sales in the fourth quarter

when stores featured new designer Daniel Lee's collection of

more expensive runway fashion.

The British group's results lagged those of rivals Hermes

and Prada, underscoring a trend that only the

higher end of the luxury market had held up against a wider

slowdown in the sector.

Its shares, which have more than halved in the last year,

were down 4%.

Burberry ( BBRYF ) has been trying to move upmarket under its latest

banner of "Modern British Luxury", with references to the

brand's 168-year-old heritage, dressing the English upper class.

Results published on Wednesday showed the extent of the

challenge facing Chief Executive Jonathan Akeroyd, with

fourth-quarter like-for-like sales slumping 12% and annual

profits down by 34% to 418 million pounds ($526 million).

Akeroyd said he remained confident in the group's strategy,

and Lee's vision, but the group was "rebalancing" its offer.

"When you launch a new aesthetic, as we did in September,

you have to put a marker down," Akeroyd told reporters. "But

there are learnings that come from that."

Lee's first runway collection, launched with fanfare,

featured his signature bold colours and a departure from

Burberry's ( BBRYF ) classic camel, red and black check print.

"The jury's still out as to whether Daniel Lee's brand

aesthetics can lead to stronger commercial success and

double-digit growth in a polarised demand environment," analysts

at Citibank said in a note to clients.

TIMELESS CLASSICS

Burberry's ( BBRYF ) like-for-like sales fell 12% in the final

quarter, dragged down by a 19% slump in China, and wiping out

gains made earlier in the year.

Akeroyd said the results underperformed the company's

original expectations, and the first half would be challenging,

but the benefit of the actions he was taking would be felt in

the second half of its financial year.

Burberry ( BBRYF ) hopes a wider range of products, including classic

men's and womenswear tailoring, with broader pricing will appeal

to those top end customers who continue to spend, including at

top brands like Hermes and Prada.

"We are continuing to refine our storytelling, incorporating

more of the timeless classic attributes that Burberry ( BBRYF ) is known

for," he told reporters.

The Americas continued to be a weak spot for Burberry ( BBRYF ), with

comparable store sales down 12% in both the year and in the

fourth quarter.

Sales in Europe, which had been improving, also fell in the

final quarter, recording a 3% drop.

Sales in London, its home market, declined 17% in the fourth

quarter, which Akeroyd blamed on a lack of tax-free shopping for

tourists. Sales in continental Europe rose 8%.

"Spending by Chinese tourists at our stores in London is

less than half of what it was compared to the pre-pandemic,

whereas it's more than tripled in Paris," Akeroyd said.

(Reporting by Paul Sandle and Suban Abdulla; Editing by Kate

Holton and Emelia Sithole-Matarise)