Unlikely Burberry
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Burberry incoming business disaster.
This week news about Burberry are not encouraging.
Picture from Burberry website landing page.
Following British media Daily Telegraph, as reported by Retail Gazette, “Luxury fashion brand Burberry is gearing up to slash hundreds of jobs under a cost-cutting programme as its profits plunge.
The retailer has lost over a third of its stock market value since the start of the year and is at risk of being booted off the FTSE 100.
The restructuring plans were announced to staff members in a Zoom meeting during late June, as impacted employees were informed they were either facing redundancy or needed to reapply for their positions.
Burberry has commenced a 45-day consultation, indicating that hundreds of jobs could be axed. The job losses are expected to mainly impact the brand’s UK offices.
While the fashion house has not confirmed how many staff members will be affected, workers believe up to 400 roles could be scrapped under the plans.
The news comes as Burberry has struggled to deliver a turnaround, with its full-year profits recently dropping 36% to £418m as it grappled with a challenging economic environment.
Sales dipped 4% over the year, as chief executive Jonathan Akeroyd admitted that “executing our plan against a backdrop of slowing luxury demand has been challenging”.
In 2020, another news came up on The Guardian highlighting
“Burberry to cut 500 jobs worldwide in £55m cost-saving drive
Plan, which includes 150 UK head office posts, comes as sales slump in Covid-19 crisis (…)
Marco Gobbetti, the chief executive, said: “We are sharpening our focus on product and making other organisational changes to increase our agility and generate structural savings that we will be able to reinvest into consumer-facing activities to further strengthen our luxury positioning.”
Marco Gobbetti moved to Ferragamo in 2022. Ferragamo as well is struggling with business growth and the new strategy put in place seems not work after two years of Gobbetti tenure.
Marco Gobbetti choice of Riccardo Tisci for Burberry didn’t pay and the same is happening under the same CEO, again, at Ferragamo.