The company is wrestling with COVID-19-related store closures, and making big sacrifices, as it ditches discounts in favor of full-price sales.
Retail and comparative store sales suffered single-digit declines in the third quarter due to lockdown, store closures and Burberry’s decision to ditch discounting and pursue full-price sales.
Burberry has turned a corner, with comparable store sales returning to growth in October, a new, younger customer base and a punchy plan to slash markdowns and preserve full-price sales.
The second quarter saw comparable store sales fall 6 percent, compared with 45 percent in the first quarter, while sales returned to growth in the month of October, according to Burberry.
Whether its customers are spending money — or not — Burberry wants them to have fun as they game their way across the Shenzhen shop floor.
The company plans to slash costs at offices, stores outside the U.K., and said second half performance will depend on government actions, and whether people can travel.
Burberry has been forced to rethink salaries, performance criteria and pensions, partly in response to the devastating impact of the coronavirus on growth.
The brand believes local markets hold the key to growth as countries worldwide start to ease out of lockdown.
Sales fell 3.2 percent in the year while operating profit was down 57 percent due to the COVID-19 crisis.
Around 40 percent of Burberry’s directly operated stores globally are now closed, with additional closures expected in the coming days.
Burberry did not quantify the impact on year-end results and stopped short of issuing a full-blown sales and profit warning.
The company has raised its revenue guidance despite a severe decline in Hong Kong, and has added an extra 5 million pounds in cost savings for fiscal 2019-20.
The second half will be challenging, as the British pound strengthens and Hong Kong deteriorates.
Le Bleis will begin work on Jan. 6, and replaces Roberto Canevari, who has taken up a role at Unilever.
The company is naming a director of diversity and inclusion, and plans to offer staff unconscious bias training.