British luxury fashion house Burberry announced Wednesday its potential reduction of nearly one-fifth of its global workforce over the next two years as part of a cost-reduction strategy, following an annual net loss.
The company, currently undergoing a strategic transformation to enhance sales and decrease expenditures amid a global luxury sector facing subdued consumer demand, particularly from China, reported a net loss of £75 million ($100 million) for the 12-month period ending in March. This contrasts with a profit of £270 million in the preceding year, according to a company statement.
Revenue experienced a 17 percent decrease, amounting to £2.46 billion.
Further cost-saving measures, aiming for an additional £60 million in savings by 2027, were announced on Wednesday. These measures are anticipated to affect approximately 18 percent of its workforce, equating to around 1,700 positions.
“While we are navigating a challenging macroeconomic environment and are still in the initial phases of our transformation, I am increasingly optimistic about Burberry’s future prospects,” stated Chief Executive Joshua Schulman.
Mr. Schulman, who assumed the CEO role in July, succeeding Jonathan Akeroyd, has outlined a strategy to regain customer engagement through a renewed emphasis on outerwear, including the brand’s signature trench coats.
Burberry’s core outerwear and scarf product lines demonstrated stronger performance compared to other categories, as indicated in the earnings statement, signaling a positive initial response to the turnaround plan initiated in November.
However, the company cautioned that the economic landscape has become “more uncertain in light of geopolitical developments,” with potential repercussions from US tariffs posing a risk to consumer confidence.
