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Burberry is to axe 1,700 jobs over the next two years as it battles to cut costs after tumbling to a £66m loss.
The British fashion house said it aimed to save an extra £100m by the end of the 2027 financial year, partly through cutting around 18pc of its global workforce.
Burberry’s shares jumped as much as 16.2pc following the job cuts announcement, making it the best performer on the FTSE 250 on Wednesday.
It came as the company revealed it had swung to a £66m loss in the year to April compared with a profit before tax of £383m a year earlier. Revenues tumbled 17pc to £2.4bn, while like-for-like sales fell 12pc.
Joshua Schulman, Burberry’s chief executive, who unveiled a turnaround plan for the business in November, admitted it had struggled after a “challenging first half” of its financial year.
The luxury fashion brand, which was founded in 1856, said it would take an £80m hit over the next two years as it follows through with the job cuts, as well as efforts to cut expenses in procurement and real estate.
Mr Schulman also said “a handful of stores will close this year”, while it will refit others with attractions such as “scarf bars” designed to show off its most popular products.
He told analysts that the company would axe the night shift at its factory in Castleford to cut costs and reduce overcapacity.
He said: “This is no longer sustainable. The proposal to move to one shift is essential to safeguard the long-term viability of our UK manufacturing operations.
“I want to reiterate our commitment to continue the tradition of making iconic Burberry heritage trench coats right here in the UK for generations to come.”
He added: “As our business regains momentum, our ambition would be to scale our UK production over time.”
The company also warned that the “current macroeconomic environment has become more uncertain” after Donald Trump upended global trading relationships with his tariff campaign.
Mr Schulman admitted that “things got pretty choppy in February”.
The US businessman took over as chief executive last July after years of failed attempts to improve sales under his predecessor, Jonathan Akeroyd.
Burberry has also struggled after the Government’s decision to introduce the so-called tourist tax, which Mr Akeroyd previously blamed for weaker sales at its London stores.
VAT-free shopping for overseas visitors was scrapped by Rishi Sunak when he was chancellor in 2021.
The company also struggled with a downturn in China following the pandemic, with lower sales in Asia the biggest drag on its performance last year.