Profits down at Burberry as turnaround plans get underway

PROFITS are down at fashion giant Burberry as the costs of evasive action take their toll.

Reported profit before tax reached £102m, down 34% after being hit by the expiry of Japanese agreements and restructuring costs.

The company had been struggling with sales and has seen a drop in profitability over the past couple of years forcing management to embark on a £100m cost saving project.

It announced measures including a focus on digital, simplifying its range and a restructuring programme which has cost the business £12.8m.

Christopher Bailey, chief creative and chief executive officer, said: “In May we outlined plans to evolve how we work as a business and to drive Burberry’s future growth in a rapidly-changing luxury environment. Since then, we have made good early progress towards realising the significant opportunities ahead of us, as we begin implementing our five strategies. We remain on track to deliver our financial goals.”

Following the Brexit decision in June 2016, the company announced it had slowed down its plans for the £50m Leeds factory it was planning on the South Bank.

Since then it has denied it has put the breakers on the development that would create 1000 jobs in the city, but has said it is reassessing the timeframe and would be going ahead with the plans at Temple Works.