Recession hits Burberry

Luxury clothing brand cuts jobs and closes Thomas Burberry line in cost-cutting mission. By Fiona Raisbeck

Luxury British clothing brand Burberry is set to axe up to 540 jobs in the UK and Spain and close its Thomas Burberry line as part of a cost-cutting operation, it was announced today. As part of a £50 million cost-saving plan, the business will shut down its sewing factory in Rotherham in Yorkshire, which would see 290 job losses, while its other Yorkshire manufacturing plant in Castleford remains open. It will also close its under-performing lower priced line, Thomas Burberry, which is predominantly aimed at the Spanish market, leading to a further 250 redundancies in Spain. This cost-cutting comes as the company announced that sales rose by nine per cent to £329 million in the last three months of 2008, but it also revealed that its like-for-like sales dropped by three per cent over the same time period. Burberry chief executive Angela Ahrendts said: "As we continue to evolve our business model, we have today announced further cost efficiencies. These savings will position us to trade through the current difficult environment and emerge even stronger when the global economy recovers."

Last week the company moved to its new high-tech headquarters as part of the group's "ongoing expansion."  Situated just a few steps from MI5 on the banks of the River Thames, Horseferry House will accommodate 850 employees. The 160,000 square-foot tower boasts sleek purpose designed interiors, a showroom and an in-house photography studio.  Designed by creative director Christopher Bailey, the new office aims to make workers feel like they're in "one big Burberry store," according to Ahrendts.

Picture: Burberry Prorsum spring/summer 2009