‘Significant deterioration’ in trading for Burberry
19 March 2020
Luxury fashion brand Burberry has reported a significant deterioration in trading in the wake of the coronavirus outbreak and is implementing mitigating actions to contain costs.
In a trading update, the listed company said that, trading had deteriorated significantly since 24 January 2020 with comparable retail store sales down by between 40 per cent and 50 per cent over the last six weeks.
Sales losses in February were predominantly in the company's Asian markets. While trading in Mainland China has started to improve, with the reopening of most of its stores, sales in EMEIA and the Americas have fallen materially in recent weeks.
More than 60 per cent of Burberry's stores in EMEIA and around 85 per cent of those in the Americas are currently closed; with those still open operating with reduced hours and with very weak footfall.
The company has begun implementing mitigating actions to contain costs and protect its financial position, including renegotiating rents, restricting travel and reducing discretionary spending.
Marco Gobbetti, chief executive at Burberry, said: "Since our February update, the material negative effect of COVID-19 on luxury demand has intensified and is now impacting the industry in all regions.
"Our primary concern is the global health emergency and we continue to take every precaution to help prevent the spread of the virus and ensure the safety and wellbeing of our employees, partners and customers.
"We are implementing mitigating actions to contain our costs and protect our financial position, underpinned by our strong balance sheet. We remain confident in our strategy and the strength of our brand and I am exceptionally proud of our teams' resilience and commitment."
Burberry has manufacturing operations in Castleford and Keighley, as well as a shared services centre in Leeds.