Luxury fashion company Burberry said it could reduce some 1,700 jobs as part of plans to reduce costs by 2027.
The brand of British designers – famous for its distinctive camel, red and black control model – announced on Wednesday the savings offered when it reported a loss of 66 million pounds sterling in the last financial year.
The proposed job cuts would reduce its global workforce by almost a fifth and include potential redundancies in its Castleford factory in West Yorkshire.
Burberry Director General Joshua Schulman said the majority of job losses come from his head office teams around the world, but that the cuts would be “naturally” focused in the United Kingdom, where most of its staff are based.
He confirmed that the Rotas staff would be reorganized and this night is traveling to its factory in Castleford, which makes a trench at the price of £ 1,000 to £ 10,000 each, would be rebuilt.
“For a long time, we have an overcapacity in this establishment, and it is simply not lasting,” said Schulman.
“But I want to be very clear that we make this change to protect our British manufacture, and in fact we will make a significant investment to renovate this factory in the second period.”
Burberry said it would align “the timetables for the circulation of advanced stores” in its stores, which would lead to the reduction of certain jobs.
He added that the savings would also come from “operating expenses, with increased efficiency of expenses in supply and real estate”.
The company said the cuts were “subject to consultation if necessary”.
Burberry was founded in 1856 and has made its famous raincoats in the Yorkshire since 1972.
The Designer brand previously announced a saving program of 40 million pounds sterling in November, which means that it now plans to create annualized savings combined of 100 million pounds sterling by spring 2027.
“Continuous resilience of our categories of outdoor clothing and scarf reaffirms my conviction that we have the most opportunities where we have the most authenticity,” said Schulman, who was appointed Managing Director in July of last year.
“While we operate in a difficult macroeconomic backdrop and we are still in the early stages of our turnaround, I am more optimistic than ever than the best days in Burberry are ahead,” he added.
Russ MLUD, investment director at AJ Bell, said Burberry’s plans were “rather radical stages in his continuous recovery effort”.
He said that Mr. Schulman, who was the former boss of the coach and Jimmy Choo, “drew the classic cost reduction lever, including a drastic planned reduction in the company’s workforce”.
“A strategy to try to compete with high-end competitors has not worked, so it is logical that, under Schulman, the company returns to its historic forces in classic outdoor clothing products such as trench and scarves,” he added.
