Pandemic strikes at Burberry’s international trade

Fashion house Burberry, which has bases in Castleford and near Keighley, says the coronoavirus outbreak has caused its trade to drop significantly.

In an update published today, the listed business says its sales losses in February were mainly in its Asian markets.

It notes: “Since 24 January 2020, trading has deteriorated significantly with comparable retail store sales tracking between -40% and -50% over the last six weeks.

“While trading in Mainland China has started to improve with the reopening of most of our stores, sales in EMEIA and the Americas have fallen materially in recent weeks.

“More than 60% of our stores in EMEIA and around 85% of our stores in the Americas are currently closed with those still open operating with reduced hours and with very weak footfall.

“In total, around 40% of our directly operated stores globally are closed with additional closures expected over the coming days.

“Following the significant escalation of governmental trading, travel and social restrictions in recent days and the inevitable impact this will have on demand, we are expecting our comparable retail store sales in the final weeks of the year to be within the range of -70% to  -80%.

“As a result, we now expect quarter four 2020 comparable retail store sales to be around -30%.

“We are implementing mitigating actions to contain costs and protect our financial position, including renegotiating rents, restricting travel and reducing discretionary spending.  

“We remain confident in the strength of our brand and our strategy. We have significant financial headroom including liquidity of £0.9bn from £0.6bn cash balances (before lease obligations) and a £0.3bn Revolving Credit Facility.”

Marco Gobbetti, chief executive officer at Burberry, said: “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.”