Burberry has announced plans to cut a potential 1,700 jobs worldwide as part of efforts to slash staff costs and return the luxury fashion brand to a profit.
The company said it was hiking its cost-cutting target to £100 million of savings per year by the 2027 financial year.
These savings will partly come from a reduction in “people-related costs”, the firm said, which could affect around 1,700 jobs globally over the two-year programme.
The British brand revealed it had tipped into a loss of £3 million in the year to March 29, swinging from a profit of £418 million the previous year.
However profits on an adjusted basis, which strips out what Burberry views as one-off costs, came in at £26 million – higher than the £11 million some analysts had been expecting.
Retail comparable store sales fell 12% year-on-year, with a 16% slump in sales across Asia dragging on the total.
Chief executive Joshua Schulman told investors: “While we are operating against a difficult macroeconomic backdrop and are still in the early stages of our turnaround, I am more optimistic than ever that Burberry’s best days are ahead and that we will deliver sustainable profitable growth over time.”
The fashion firm has been struggling against a slump in demand among shoppers in China, one of its biggest markets, which has been dragging heavily on sales.
It launched a £40 million cost-cutting programme in November after first sinking into a loss.
On Wednesday, Burberry said it wanted to make an additional £60 million worth of savings by the 2027 financial year, which would bring the target to a combined £100 million.
The brand said sales had improved over the second half of the latest year, compared with the first half, which gave it “confidence” that its strategic plan was starting to pay off.
Demand for its popular staple styles including trench coats and scarves meant the retailer’s outerwear category continued to perform better than other products.
