As part of a comprehensive cost-saving plan that aims to stabilize the business, Burberry will have a loss of 66 million pounds of 66 million pounds after a strong downturn in the global luxury market.
The legendary British fashion house announced the measures on Wednesday, with most cuts come from central functions, especially in London, in the next two years. Additional reductions result from surgical changes in his Castleford factory in West Yorkshire, where the night shift is scrapped and the employees are reorganized.
The move is part of a cost reduction strategy, which was led by the new managing director Joshua Schulman, who took part in a mandate in July to turn the company around. The plan aims to achieve new savings of 60 million pounds and to achieve an annual overall savings to £ 100 million by the end of 2027.
Despite the extent of the cuts, Schulman – a veteran of the luxury industry with previous roles at Jimmy Choo and Coach – had a confident tone. “I am more optimistic than ever that Burberry’s best days are ahead of us,” he said, although he recognized the increasingly uncertain macroeconomic environment, which was partly driven by geopolitical instability.
The investors seemed to be calmed down, and the shares of the FTSE 250 company rose by 8.1% to 894p in the morning trade.
For the financial year to March 29, Burberry recorded a decline in the power -like sales by £ 12.5 billion, as well as a sharp swing of a profit of 383 million GBP in the previous year to a loss of 66 million GBP. While the numbers reflect the effects of a broader industry pressure, they were not as serious as some analysts had feared.
The company was difficult in China, one of the most important markets, to be of demand. The turnover on the Chinese mainland fell by 15% in the course of the year, with 8% declining in the fourth quarter alone. The global Chinese customer group also decreased by a percentage mid-segloge-percent share compared to the previous year.
Trade tensions have contributed to the headwind. President Trump’s comprehensive tariffs for luxury goods escalated the continued trade war with China and created a new uncertainty for brands that rely on worldwide demand. A 90-day ceasefire between the USA and Beijing, which has announced this week, has offered a glimmer of hope that the tensions can decrease.
Schulman’s “Burberry -Forward” strategy aims to find the brand to its best -known products -including trench coats and scarves, which can be found between 420 and 2,500 GBP in retail in retail in retail in order to expand a broader consumer basis.
Since the global luxury sector grants himself a more careful consumer landscape and increasing political volatility, Burberry’s restructuring signals a difficult but necessary repositioning. The brand now stands for the challenge of developing growth again and at the same time remaining loyal to its British heritage – and this with a slimmer, more focused workforce.