Burberry reveals Yorkshire investment as profits grow despite Hong Kong protests

Burberry has plans to make further investment in its manufacturing operations in Yorkshire, where it makes the world famous Burberry trench coats.

Burberry has revealed its 2019 festive campaign
Burberry has revealed its 2019 festive campaign

When asked if the group plans further investment in the region, the group’s chief financial officer Julie Brown said: “Absolutely – we remain committed to Yorkshire and the UK and continue to invest in our existing manufacturing operations in Castleford and Keighley.”

There was no news on the sale of the 10 acres of land in Leeds next to the Temple Works building.

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Ms Brown said: “As you know, we confirmed that we decided to sell the land we own in central Leeds as we concluded that the site was not suitable to support our plans. We don’t have an update beyond this today.”

The firm said there has been further expansion to Burberry Business Services in Leeds, which has been boosted by the decision to move work from New York to Yorkshire.

”We are continuing to grow our shared services centre in Leeds – which is now at nearly 400 employees and covers EMEIA and the Americas,” said Ms Brown.

The update followed the news that Burberry is renegotiating leases with landlords in Hong Kong after ongoing protests led to a massive drop in sales in the city.

The British fashion house said sales in the region declined by double digits in the first six months of the year, and warned that more was yet to come.

The group said it expects Hong Kong sales to remain under pressure. Sales in the region accounted for 8 per cent of global sales before the protests. The figure dropped to 5 per cent in the most recent quarter.

Ms Brown said the group had been forced to close some stores to keep staff safe, but none had been damaged.

She did not reveal any plans to close stores permanently, but said the group is trying to renegotiate leases with landlords.

Despite these pressures, the company still managed to increase adjusted operating profit by 14 per cent to £203m in the six months to September 28.

Revenue rose 5 per cent to £1.3bn.

Burberry kept its 2020 outlook broadly unchanged despite “incremental pressure” on gross margin from the disruptions in Hong Kong.

Anti-government protests have been raging in Hong Kong for months, forcing many retailers to shutter stores as demonstrators clash with police.

A shining light in the second year of Burberry’s transformation plan was its clothes designed by Riccardo Tisci.

Sales of his collections showed “strong” double-digit growth, meaning new products are around 70 per cent of what is on offer in Burberry’s mainline stores.