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Burberry feels the pandemic’s impact

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Miguel A. Rodriguez
Miguel A. Rodriguez
14 September 2020
Burberry to scrap 50 million to keep itself afloat

The pandemic made no exception when it took a swing at companies. The one in our attention today is Burberry – the British luxury fashion house.

During the last quarter, the London-headquartered company reported a 48% decrease in retail sales, all the way down to 257 million pounds. Europe and the Middle East made up for 75% of it due to store and office closure. In the UK, closed stood closed for longer than Asia and Europe.

To protect and keep itself afloat, the company announced that it would dismiss 500 people. The number represents roughly 5% of the total workforce, as the company has 3,500 people employed. Out of the 500, 150 will be in the UK and the rest from overseas. The company's goal is to save 55 million pounds/year.

As far as the store closure goes, no stores outside the Kingdom will be shut down, but Burberry will cut on staff and will implement a work from home shift in some areas. However, the 13 stores in Hong Kong will be under review, as the Coronavirus and the pro-democracy protests impacted the sales. At the moment, the area accounts for 3% of the company's overall sales.

Burberry has been in a pickle for quite some time, as last year it canceled the shareholders' 120-million-pound payment and was part of the UK' government-backed support scheme. The program brought the company 300 million pounds.

Currently, the company is trading at -6.30%.

Read more about the earnings season on CAPEX.com!

Sources: theguardian.com, cnbc.com, finance.yahoo.com

This information/research prepared by Miguel A. Rodriguez does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. The research analyst primarily responsible for the content of this research report, in part or in whole, certifies that the views about the companies and their securities expressed in this report accurately reflect his/her personal views and consequently any person acting on it does so entirely at their own risk.The research provided does not constitute the views of KW Investments Ltd nor is it an invitation to invest with KW Investments Ltd. The research analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.The research analyst in not employed by KW Investments Ltd. You are encouraged to seek advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit that conforms to your specific investment objectives, financial situation, or particular financial needs before making a commitment to invest. The laws of the Republic of Seychelles shall govern any claim relating to or arising from the contents of the information/ research provided. 

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Miguel A. Rodriguez
Miguel A. Rodriguez
Financial Writer

Miguel worked for major financial institutions such as Banco Santander, and Banco Central-Hispano. He is a published author of currency trading books.