Burberry Continue To Streamline The Cost Plan And Pfer 300 Headquarters Staff

Britain in the doldrums

Group Burberry Group PLC (BRBY.L) Bob Boli Group continues to tighten its cost plan, which announced on Thursday that it will pfer 300 London headquarters staff to the new office of Liz, the northern city to be opened in October, which will enable the group to reduce office space in London.

Christopher Bailey Bailey, chief executive of the outgoing group, said the move was an important action taken by the group last year. It not only helped the group's performance, but also strengthened its ties with Yorkshire.

The hometown of the symbolic windbreaker.

Burberry Group PLC Boboli said in a statement that the Liz business service center will undertake the functions of the UK, EMEIA business, HR, procurement, IT, customer service and so on.

Liz has been a key city of group business pfer. The group had planned to invest 50 million pounds in this plant. However, due to the unexpected European referendum result, the group postponed the plan after a referendum in mid July last year, but the target remains unchanged.

At the end of 2015, Burberry Group PLC Boboli group issued a business decision plan, decided to unify product lines and build new windbreaker factories.

Burberry Prorsum, Burberry London and Burberry Brit will gradually withdraw from the stage of history before the end of 2016, and all product categories will be integrated into a single "Burberry" brand, which will be listed in the summer of 2016.

In addition, the group disclosed that it will invest more than 50 million pounds to build a windbreaker factory and an affiliated weaving factory in Liz, northern England.

The original project will start in 2016, and will be completed by the end of 2018. The 770 employees of the Castleford windbreaker factory and the Keighley weaving factory will also move to the new factory. In addition, the factory will create more than 230 jobs.

At present, the Castleford factory in the UK produces about 5000 windbreaker per week, and its capacity is already saturated, and the new factory capacity will increase to two times to 15000 per week.

In mid January, Burberry Group PLC, the chief financial officer and chief executive officer of Julie Brown, said in an interview that the establishment of the factory and the new business service center are two completely independent operations, and the pfer of some business services responsibilities is still in the preliminary stage.

After two consecutive years of profit decline and the release of the annual report in mid May 2016, the Burberry Group PLC Bo Bo Li group announced a cost reduction plan of 100 million pounds. In the fourth quarter performance report released in the middle of last month, the group reaffirmed the expected flat profit in the 2017 fiscal year.

According to the world clothing and shoe net, as of the end of March 2016, the Burberry Group PLC Bo Bo Li group had a 10% decline in pre tax profit after adjustment, and fell by 7.7% to 420 million 600 thousand pounds in real terms.

Streamlining the cost plan includes group executive welfare reduction, Burberry

The conference was merged, and Marco Gobbetti, the chief executive of the group, served as executive chairman of the Asia Pacific and Middle East market before being taken up in early July. It was also seen as a cost reduction measure because if Christopher Bailey was to step down before the expiration of the contract, the company not only needed to pay a certain amount of liquidated damages, but also might have to pay more for Marco Gobbetti's contracts in different financial periods.

In the early recovery of luxury industry in early 2017, Burberry Group PLC Bob group still lost its main competitor.

In the four quarter of March 31st, the comparable sales of the group increased by only 2%, less than the 4%-5% expected by analysts and also slowed down by 3% over the three quarter.

In the Americas, which accounted for more than 1/4 of the total revenue, the decline in the median income was recorded. The group explained that the strength of the US dollar led to an increase in overseas consumption of us customers (the sales in the British market in the second half of the fiscal year increased by 90%), while the demand for domestic customers and foreign tourists in the United States was suppressed. In addition, the group had to reduce the number of promotional days by 10 days and withdraw from department stores that were not in the prime location, so as to protect brand positioning in the American retail environment with a wild discount.

UBS AG UBS analysts pointed out that the discount strength of American department stores is a challenge to the luxury retail group's own retail stores, and Burberry Group PLC Bob Bailey's current measures will continue to pressure sales in the short term.

{page_break} the mainland's performance in the four quarter of the group is in line with the trend of luxury peers, achieving a high single digit growth. Only Hongkong has been shrinking due to the decline in passenger traffic and the decline in South Korea's economy and promotional activities. The Asia Pacific region still has low single digit growth.

EMEIA has benefited from double-digit growth in strong sales in the UK and improved in France and Europe, but the Middle East remains a challenge.

Julie Brown, the analyst at the fourth quarter earnings conference, revealed that the demand for tourists from Britain and Europe was strong and British demand was also good. However, she pointed out that although the British economy is strong, there will be instability during the period of EU departure.

In the second half of fiscal year 2017, the total revenue of Burberry Group PLC Bo Bo Li was 1 billion 595 million, an annual increase of 14.4%, and 1% after the exchange rate.

Retail income increased by 19.2% to 1 billion 268 million pounds, fixed exchange rate growth narrowed to 3%, wholesale income fell 0.9% to 327 million pounds, and the cosmetology department dragged down the fixed exchange rate by 13%, half of which fell from the beauty department, reflecting the group's optimization of distribution channels for key beauty products and the action of distributors to reduce inventories.

In early April, the group had announced that the beauty business had been handed over to the Coty Inc. (NYSE:COTY) Coty agency from October.

Authorized revenue was also cut by 38% due to the termination of authorized business in Japan.

The sales performance of Burberry Group PLC, Bob Bailey, in the second half of fiscal year 2017 shows that the overall performance of the luxury goods industry is in the context of the overall recovery.

No fashion Chinese network (micro signal: nofashioncn) data show that, according to the income of the world's two largest luxury group LVMH Mo t Hennessy Louis Vuitton SE (MC.PA) road Wei Ming Xuan group (fashion and leather goods department) and Kering SA (MC.PA), Kai Yun group achieved 15% and 28.6% organic / comparable sales growth in the recent quarter.

Unlike Burberry Group PLC, Bob Bailey, which relies on cost reduction and product restructuring to enhance profitability, Kering SA has opened up a new image of Gucci Gucci, Yves Saint Laurent, Saint Laurent and Balenciaga, and so on to improve sales and profitability.

Burberry Group PLC Boboli emphasized that the supply of products has been rectified. Sales of spare parts in the second half of this year have been booming, with leather products growing at 14%-16%.

However, Exane BNP Paribas SA, an analyst with Luca Solca, Paris, France, believes that the weakness of the group is that the size of handbags and accessories is not as large as that of its main competitors, and the category is the fastest growing category in the industry.

Liberum Capital analyst Tom Gadsby also pointed out that the 1% decline in revenue in the second half of the year proved that the brand's design and image had not been able to detonate demand.

Luca Solca believes that the group needs product innovation to win the market.

This means that the former C e line CEO Marco Gobbetti, who will succeed Christopher Bailey as CEO in July, is clearly facing enormous challenges, and Christopher Bailey will continue to be the chief creative officer.

Luca Solca said that if Marco Gobbetti Gobbetti continues the Burberry Group PLC strategy, the group will continue to backslide.

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