Burberry says too early to say if it will scrap flagship Leeds facility

Models on the catwalk during the Burberry Autumn/Winter 2017 London Fashion Week show
Photo: Victoria Jones/PA Wire — Models on the catwalk during the Burberry Autumn/Winter 2017 London Fashion Week show Photo: Victoria Jones/PA Wire

When asked whether the plans could be scrapped, Julie Brown, chief finance officer of Burberry, told The Yorkshire Post: "It's a very important decision for Burberry. It's too early to say.

"Clearly we have had a number of management transitions and we have a new CEO starting in July. It's a big decision for Burberry.

"We are considering the implications for Brexit."

She added that the group is committed to its operations in the region.

"We are very committed to Yorkshire. We have excellent facilities already there," she said.

The firm announced in late 2015 that it would move its Castleford and Keighley staff to Leeds’ South Bank.

Work on the facility was originally due to begin last year, set to be completed in 2019, but the Brexit vote scuppered the plans and the move has been placed on hold.

It is now thought that incoming chief executive Marco Gobbetti will make the final decision on whether to open the new site or scrap the plans and keep the existing operations in Castleford and Keighley.

In an entirely separate move, Burberry announced plans earlier this month to relocate 300 jobs to Leeds city centre from its London headquarters.

Ms Brown declined to comment on rumours that the group has let a 46,000 sq ft office at 6 Queen Street in Leeds.

Asked whether this address would be the new office, Ms Brown said: "At this stage we can't make any firm commitment."

She also said it was too early to say how many London staff have agreed to relocate to the new Leeds office, which will house much of Burberry’s finance, procurement and human resources operations, as well as some call centre and IT personnel.

She said the move is part of a plan to deliver at least £100m in cost savings by 2019.

She was speaking as Burberry announced a 21 per cent fall in annual underlying pre-tax profit to £462m following weak wholesale trading in the US.

However Burberry has benefited from the fall in the pound following the vote to leave the EU, which boosted operating profits by nearly £130m.

Including the fillip from the weak pound, underlying profits rose 10 per cent, while Burberry cheered ongoing "exceptional" sales in the UK thanks to the boom in spend on luxury goods from tourists.

The group cautioned the benefit from the pound would begin to fade later this year, which will hit hit profits in the new financial year by around £30m.

Outgoing chief executive Halifax-born Christopher Bailey said: "2017 was a year of transition for Burberry in a fast-changing luxury market.

"The actions we have taken to lay the foundations for future growth are yielding early benefits and I remain confident that these will build over time."

The full-year results outline the challenges facing new boss Marco Gobbetti, who takes on the top role in July, when Mr Bailey will step aside to become president and chief creative officer.