Burberry to close design plant with a loss of 300 jobs

BURBERRY is cutting back on its loss-making Spanish operations with 300 jobs to be axed.
The company will stop designing and selling exclusive collections for Spain after Autumn/Winter 2010.

A facility in Barcelona, which is responsible for the Spanish collections, wil be closed.

Burberry said that this would result in a one-off charge, but that its adjusted profit before tax for 2009/10 remains “in line with expectations”.

In May 2009, the company blamed charges at its Spanish operations for its £16.1m loss for the year to 31 March 2009.

Blaming “the continued economic downturn in Spain”, the group said it was “no longer viable for Burberry to design and sell collections produced exclusively for this market”.

Burberry is implementing a £50m global cost cutting campaign – with the Spanish operation being the main target.

In January this year, Burberry said it would cut up to 290 jobs in the UK, and a further 250 jobs in Spain, as it closed its Thomas Burberry line.

It had already reduced its staff numbers by about one-third in Spain.

Burberry is considered a mid-market brand in Spain unlike in the UK where its is considered a luxury.

The county’s financial woes have led to a retail downturn. Spain was the only region to show a sales decline at the company’s half-year results reported in November. More details of the impact of the restructuring will be given at the group’s full year results in May.