Burberry praises Yorkshire colleagues for their pandemic efforts

Burberry s Yorkshire staff volunteered to make PPE to help out the NHS during the pandemic and nearly 200,000 items of PPE have been donated.

Burberry thanked its Yorkshire staff as it announced a 32 per cent leap in fourth quarter sales thanks to strong demand in Asia and the US.

Julie Brown, Burberry’s chief operating and chief financial officer, said that both the Castleford and Keighley sites are now up and running.

"We installed testing early on to support our employees and they've done a phenomenal job in supporting the relief efforts," she said.

"Both Keighley and Castleford are performing extremely well and we're delighted to have production returning to normal."

She reported progress in the sale of the 10 acres of land Burberry owns in Leeds next to the Grade I listed Temple Works building, which was put up for sale in 2019 after Burberry decided the land was not suitable for its development plans.

"We're looking forward to progressing with this," she said.

"There is nothing to update you on at the moment, but the sale is progressing and we look forward to the next stage of being able to optimise the site."

The group said the fourth quarter bounce back in like-for-like store sales came despite 16 per cent of its shops globally still remaining closed due to lockdowns as it resumed dividend payouts to shareholders.

The performance helped limit the fall in full year revenues to 11 per cent, or 10 per cent at constant exchange rates, with retail turnover down 9 per cent.

Burberry said its UK shops were showing “good promise” since reopening on April 12, but added that their performance was being held back by the lack of tourism spend, which accounted for two thirds of UK business before the pandemic.

The full-year results showed a 12 per cent fall in underlying pre-tax profits to £366m for the year to March 27.

Underlying operating profits were 9 per cent lower at £396m, but surged to £521m on a reported basis from £189m the previous year.

Burberry said it expects revenues to continue recovering over the year ahead, with growth in the “high single” digits, though an ongoing push to reduce markdowns will constrain its like-for-like performance.

It restarted dividends with a 42.5p a share full-year payout, matching 2019 levels.

The group said full-price sales jumped 63 per cent in its final quarter, driven by demand in mainland China, Korea and the US.

Burberry has benefited from stores being open again in these areas, even though sites across Europe remained shut due to Covid-19 restrictions.

Burberry has also been focusing on selling more products at full price, rather than with discounts.

Chief executive Marco Gobbetti said: “In spite of Covid-19, we achieved our objectives for the period and delivered a strong set of results in 2020-21, ending the year with good full-price sales growth.

“In this next chapter, supported by these foundations and the strength of our teams, we will accelerate our growth.”

The results showed the difficulties in trading across the UK and Europe throughout recent Covid lockdowns and the absence of travel spend, with annual comparable store sales plunging 44 per cent across the wider Europe, Middle East, India and Africa regions.

“The UK remained challenged, with London performance weak given high tourist exposure,” Burberry said.

Ms Brown said the group is not expecting tourism spend to recover to pre-pandemic heights for a “number of years”, with long-haul travel set to take longer to bounce back.

The group is having to focus its efforts on targeting local domestic customers as well as boosting its online offering.

Richard Hunter, head of markets at interactive investor, said: “Burberry has not only put a tough year behind it, but has also clearly turned a corner in positioning for strong future growth.”