Burberry to close one in 10 of its stores
today May 17, 2019
Burberry will close 38 stores worldwide as part of a new transformation plan led by CEO Marco Gobbetti to move more upmarket.
This means 10% of the British brand’s store portfolio will be impacted by the new strategy, as the company shifts gears to transform its flagship stores into fully-fledged luxury destinations for wealthy shoppers.
It remains unclear which stores will close, but Burberry told The Guardian that five sites have already shut in Brazil and Spain.
Burberry shares fell 5% on Thursday after the company unveiled its latest set of results. Whilst sales for the year to 30 March remained stable at £2.7 billion, operating profit was down 6% to £438 million and the report did little to reassure concerned investors of a Chinese slowdown.
As part of the long-promised turnaround, Gobbetti has brought in Italian fashion designer Riccardo Tisci to help inject energy into the 163-year old brand. His first collections, released in stores at the end of February, have been well received by customers but the extent of his influence will be only fully revealed in the new financial year.
Earlier this month Burberry sold a 10-acre site in Leeds where it was planning to build a £50 million British manufacturing base. The project was spearheaded by former creative director Christopher Bailey, who left the brand in 2017 amid investor concerns over flagging sales in China and the Middle East.