Around 500 jobs to be axed at Burberry but what about its Yorkshire operations?

Burberry factory in Castleford.Burberry factory in Castleford.
Burberry factory in Castleford.
Around 500 jobs are being cut at luxury fashion firm Burberry in the UK and globally as it axes office space and makes cuts across stores outside Britain after lockdown sent sales tumbling.

The firm said around 150 office jobs are expected to go in the UK, where it is headquartered, and a further 350 overseas as it looks to slash annual costs by a further £55m.

This comes on top of the previously announced £140m cost savings.

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The cuts may affect around 5 per cent of its 10,000 global roles. Out of this figure, around 4 per cent of the 3,500 roles in the UK may be affected.

It said it would also look to axe some office space as home working has proved successful amid lockdowns worldwide.

The group did not say how many offices would go or where, but confirmed it would keep its Horseferry Road HQ in London and its Leeds site.

It also stressed UK retail and manufacturing jobs would not be affected by the latest cost-cutting plans.

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The details came as Burberry revealed comparable retail sales plunged 45 per cent in the three months to June 27 due to the coronavirus lockdown closing stores and amid travel restrictions worldwide.

Retail revenues were 49 per cent lower.

It started the quarter with around 60 per cent of stores closed, which reduced to 50 per cent in June.

London was among the cities particularly badly impacted, as the firm makes much of its sales in the capital from tourist trade, which was been decimated by the grounding of planes during lockdowns.

Marco Gobbetti, chief executive of Burberry, said: "Sales were severely impacted by the drop in luxury demand from Covid-19 and we expect it will take time to return to pre-crisis levels with the resumption of overseas travel."

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He added: "As we enter the second phase of our strategy, we are sharpening our focus on product and making other organisational changes to increase our agility and generate structural savings that we will be able to reinvest into consumer-facing activities to further strengthen our luxury positioning."

The group also warned it expects its second quarter to the end of September to be "materially impacted" by the pandemic, with sales forecast to drop by up to 20 per cent.

This comes after comparable sales declines narrowed to 20 per cent last month.

"In retail, tourist flows are likely to remain negligible, and store operations are continuing to face significant headwinds, with some remaining closed and operating with reduced trading hours," it said.

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It said trading in the second half will "largely depend on the actions governments pursue to control the spread of the virus as economies restart", including the potential for a second peak of the pandemic and additional lockdowns.

The firm has its trench coat factory operations in Castleford. Burberry also has operations in Keighley and a business services office in Leeds.

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