×
2 720
Fashion Jobs
SELFRIDGES
Events Coordinator Ftc
Permanent · BIRMINGHAM
DOROTHY PERKINS
Ecommerce Executive
Permanent · LONDON
VF INTERNATIONAL
Lead Warehouse Project Manager
Permanent · COALVILLE
JOHN LEWIS
Team Manager – Operations
Permanent · LEEDS
BEGG X CO
Sales Supervisor And Associate
Permanent · LONDON
BOOHOO GROUP
Warehouse Team Manager - pm Shift
Permanent · WELLINGBOROUGH
JOHN LEWIS
Section Manager Warehouse
Permanent · WEYBRIDGE
HARRODS
Supply Planning Assistant Manager
Permanent · THATCHAM
BOOHOO GROUP
Senior Operations Manager
Permanent · BURNLEY
MULBERRY
Commercial Finance Analyst
Permanent · LONDON
SELFRIDGES
Assistant Events Manager (Exchange Square)
Permanent · MANCHESTER
VF INTERNATIONAL
Lead Warehouse Project Manager
Permanent · COALVILLE
VF INTERNATIONAL
Warehouse Operations Manager
Permanent · COALVILLE
ESTEE LAUDER
le Labo - Fragrance Specialist - le Labo, Edinburgh - 40 Hrs/Week - Full Time, Permanent
Permanent · Édimbourg
HEAD OFFICE
Buyer, Apple
Permanent · LONDON
HEAD OFFICE
Buyer – Nursery & Baby
Permanent · LONDON
HARRODS
Buyers Clerk - Furniture And Bed & Bath
Permanent · LONDON
HARRODS
Senior Buyers Clerk - Fine Watches & Jewellery, Homeware & Furniture
Permanent · LONDON
VF INTERNATIONAL
Credit Controller - Italian Speaking
Permanent · CALVERTON
VF INTERNATIONAL
Credit Controller
Permanent · CALVERTON
BOOHOO GROUP
Site Operations Manager
Permanent · BURNLEY
SHISEIDO
Shiseido Assistant Business Manager - Harrods (37.5 Hours)
Permanent · London
By
Reuters
Published
May 18, 2016
Reading time
3 minutes
Share
Download
Download the article
Print
Click here to print
Text size
aA+ aA-

Burberry to focus on bags and basics to reverse decline

By
Reuters
Published
May 18, 2016

British luxury brand Burberry said it would shrink its product range and focus more on handbags, seeking to overhaul its business after its annual profit dropped in a tough market that shows no sign of improving this year.


Burberry


Burberry, which has lost more than a third of its market value over the past 12 months, said it aimed to make at least 100 million pounds ($144 million) in annual savings by 2019.

As part of that drive, the 160-year-old brand - famous for its trench coats lined with checks - said it would axe 15-20 percent of it individual products over the coming year across multiple lines.

It said its designers would focus more on handbags, a higher-margin and faster-growing area than clothing, and one where it lags rivals like Louis Vuitton and Prada.

Christopher Bailey, who combines the roles of chief executive and chief designer, said he was "committed to making the changes needed" at Burberry. But he added: I am mindful we are embarking on this plan at a time when our industry is facing significant challenges."

Like its luxury competitors, Burberry has been hit by a sales slowdown in Hong Kong and mainland China, while flagship stores in European capitals have been deserted by many Chinese tourists after last year's attacks in Paris.

The British brand is also not as good as its rivals at retailing basics, Bailey said. Its sales per square foot of about 1,600 euros per year are around a third of market leader Louis Vuitton's and also significantly below Prada and Moncler, according to UBS analysts.

Burberry said on Wednesday it would make its stores more productive by tailoring ranges for local customers, improving customer service, training staff to a higher level and changing layouts to highlight a simpler range of goods.

GLOBAL BRAND

The company is a brand famous across the world whose designs have been modeled by Kate Moss, Cara Delevingne and Eddie Redmayne. It unveiled its overhaul plan after reporting a 10 percent drop in adjusted pretax profit to 421 million pounds for the year to end-March - broadly in line with analyst forecasts.
It increased its full-year dividend by 5 percent to 37 pence, and said it would buy back up to 150 million pounds of shares, starting this year.

Burberry also gave a bleak outlook for the current financial year, saying it expected profit to come in toward the bottom of market forecasts, which it said ranged from 375-449 million pounds, and be more weighted to the second half than last year.

Shares in the company, which have fallen 37 percent in the last 12 months, were down 2.8 percent at 1,111 pence at 0817 GMT.

Chief Financial Officer Carol Drinkwater said trading in Hong Kong - which along with Macau analysts say accounts for about 8 percent of sales - was tough, but the group's stores there were still profitable, and all luxury brands were being hit. "Conditions remain extremely challenging," she said.

The United States, which accounts for about 22 percent, also remained subdued. "In the U.S. we do see opportunities long term but clearly current trading is challenging," the CFO said.

The company said it would also make costs savings - toward the 100 million pound annual goal - by improving efficiency throughout the business, without going into detail.

It said the drive would cut the group's operating costs by about 10 percent excluding fixed rent and depreciation. Only around 20 million pounds of savings will come through in the current year, however.

$1 = 0.6936 pounds


 

© Thomson Reuters 2022 All rights reserved.