Burberry Group this week reported third quarter revenue up 9% underlying (30% reported), despite it cutting 540 jobs. Angela Ahrendts, Chief Executive Officer, said: “Revenue at Burberry increased by 9% at constant currency (30% reported), in what remained challenging and volatile markets. There was an improved retail performance in December, albeit with continuing pressure on gross margin.
As we continue to evolve our business model, we have today announced further cost efficiencies. These are enabled in part by the investments we have previously made in supply chain, IT and infrastructure. These savings, coupled with our proven strategies, strong brand perception and conservative balance sheet position us to trade through the current difficult environment and emerge even stronger when the global economy recovers.”
The company reported retail revenue up 12% with comparable store sales down 3%. Wholesale revenue up 8% and licensing revenue down 8%.
Burberry, a 153-year-old business famous for its check-patterned raincoats, said that the redundancies, which also include 250 jobs in Spain, would save between £30million and £35million. “It’s extremely challenging, volatile and difficult,” Stacey Cartwright, its chief financial officer, said of present trading conditions.
The company angered unions by closing its sewing factory in Rotherham, South Yorkshire, without telling workers. Tim Roache, regional officer of the GMB union, said: “The GMB and its members were given no notice of this announcement. The first we heard of it was from the media. It is completely outrageous.”
Image: Burberry campaign