Burberry badly impacted by collateral effects of COVID-19

Worldwide
Published:  19 March, 2020

The British fashion label said that, since January 24, trading has deteriorated significantly with comparable retail store sales tracking between -40% and -50% over the last six weeks.

On February 7, Burberry said its sales losses were predominantly in its Asian markets but, while trading in Mainland China has started to improve with the reopening of most of the brand’s stores, sales in EMEIA and the Americas have fallen materially in recent weeks, with over 60% of Burberry stores in EMEIA and around 85% of its stores in the Americas currently closed, with those still open operating with reduced hours and with very weak footfall. In total, around 40% of the company’s directly operated stores globally are closed, with additional closures expected over the coming days.

“Following the significant escalation of governmental trading, travel and social restrictions in recent days and the inevitable impact this will have on demand, we are expecting our comparable retail store sales in the final weeks of the year to be within the range of -70% to -80%. As a result, we now expect Q4 2020 comparable retail store sales to be around -30%”, said Burberry in a statement, adding that it is implementing mitigating actions to contain costs and protect its financial position, including renegotiating rents, restricting travel and reducing discretionary spending.