Burberry to focus on its Castleford and Keighley sites

Luxury retailer Burberry is to maintain its manufacturing sites in Castleford and Keighley and has no plans to develop the 10 acres of land it owns in Leeds next to the Grade I listed Temple Works building.

The group said its new Burberry Business Services site at 6 Queen Street in Leeds city centre is performing well

When asked about the group’s plans for its Yorkshire sites, chief operating and financial officer Julie Brown said: “There is no intention to close the Castleford and Keighley sites. We are very committed to manufacturing in the UK."

When asked if the group will sell the 10 acres of land it owns in Leeds, she said: "We have no comment on the sale of the Leeds property."

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Last year Burberry let an option lapse on the Grade I listed Temple Works building in Leeds' South Bank​. The firm said it still owns land in Leeds and reiterated that it is committed to Yorkshire.​

The group said its new Burberry Business Services site at 6 Queen Street in Leeds city centre is performing well

​The luxury fashion brand had been considering whether to develop the 10 acres of land it owns next to the building or whether to maintain the sites it currently owns ​​at ​Castleford and Keighley in Yorkshire. Another option was to build a new green field site.​

The group said its new Burberry Business Services site at 6 Queen Street in Leeds city centre is performing well and Ms Brown described the site as "agile". The firm expects to employ 400 people at the site by the end of the year.

The opening of Burberry ​Business Services in Leeds last October brought together staff from Burberry’s finance, HR, procurement, customer service and IT teams to simplify processes and teamwork across functions. ​It has taken ​over four​ floors in the building.

The firm has said that the historical connection with Burberry and ​its​ trench coat manufacturing in Yorkshire marries well with Leeds as a developing centre and a cultural hub.

Burberry has said c​onnectivity between ​its​ London and Leeds bases will be of the utmost importance and ​its​ head office will remain in London.

Burberry said that as it already has two manufacturing sites in Yorkshire (at Castleford and Keighley) and a warehouse in Blyth, Northumberland​, it made sense for the group to have an office hub in the North of England.

The update came as the firm announced higher annual profits despite falling UK sales as the rising pound knocked back tourist demand.

The group reported a 5 per cent rise in bottom-line pre-tax profits to £413m in the year to March 31.

Group comparable store sales rose 3 per cent, although it revealed that growth halved in the second half of its financial year, from 4 to 2 per cent.

Recent trading was dragged lower by falling UK sales in the final six months as the group failed to match the previous year's impressive performance, when sales surged thanks to a spending spree by overseas shoppers taking advantage of the weak pound.

Overall the UK saw a "low single-digit percentage" rise in sales over the year, Burberry said.

Results for the wider group showed a bounce-back after a tough previous year, when profits tumbled by 21 per cent after being hit by weak wholesale trading in the US.

Burberry chief executive Marco Gobbetti said: "In a year of transition, we are pleased with our performance as we began to execute our strategy.

"While the task of transforming Burberry is still before us, the first steps we implemented to re-energise our brand are showing promising early signs."

Results showed underlying pre-tax profits rose 2 per cent to £471m, or 5 per cent higher with currency effects stripped out.

Mr Gobbetti is slashing costs - targeting £120m a year in cuts by 2019-20 - and is axing under-performing stores as part of his overhaul.

The store closures are set to see retail sales fall by 1 per cent in the new financial year, although Burberry is expecting "broadly" stable revenues and profit margins.

It cautioned in its latest results that the pound's recent recovery was set to have a higher-than-expected impact of around £40m on underlying earnings in the new financial year.

The group had previously benefited from the pound's slump following the Brexit vote.