Restructure underway for Burberry as profits slip
Profits are down at Burberry after a difficult year in which CEO Christopher Bailey spearheaded a major restructure, including a relocation to Leeds, with a major office site tipped as its latest acquisition.
Reported profit before tax is down to £395m for the year to March 2017, from £416m the year before. Underlying revenue dipped 2% to £2.8bn.
It had benefitted to the tune of £10m from the drop in the value of the pound, but said this would reverse in the coming year, impacting by around £30m.
The fashion giant, which has plans for a factory for its iconic coat on Leeds’ South Bank, also announced that it would be moving business service centre jobs from London to Leeds as part of a major cost-cutting exercise. A major letting has been completed at 6 Queen Street. A 46,000 sq ft office in the 70,000 sq ft building is said to be the new home of Burberry in Leeds.
Burberry reported that it delivered £20m of savings for the full year to 2017, and planned to increase this to £50m in 2018, with its eye on £100m savings by 2019.
It said it continued to take “strategic actions” to strengthen the brand and reposition for growth.
Christopher Bailey, Chief Creative and chief executive officer, commented: “2017 was a year of transition for Burberry in a fast changing luxury market. The actions we have taken to lay the foundations for future growth are yielding early benefits and I remain confident that these will build over time.
“Marco Gobbetti assumes the role of CEO from July. With his extensive experience in the sector, we will build on these foundations to elevate and strengthen the brand further and take Burberry to the next level as a global luxury retail and digital business. I am excited to work closely with him in this next chapter.”
