Burberry has announced a store closure programme as part of a strategic overhaul that will see it focus its efforts solely on luxury shoppers.
The plans are part of new chief executive Marco Gobbetti’s vision for the company, in a bid to “sharpen” the brand’s positioning.
Burberry did not say how many stores it will “rationalise” or the number of staff affected by the move, but the closures will mainly affect its wholesale arm, which represents 30% of the group’s business, and will initially focus on the US and Europe.
The new CEO is calling time on non-luxury stores (PA)
“To ensure our distribution is consistent with our brand positioning, we will rationalise non-luxury wholesale and retail doors, with an initial emphasis on the US and then EMEIA (Europe, Middle East, India and Africa ).”
Burberry will ditch its outlets within department stores, and shutter shops that are not found in or near communities of luxury shoppers.
The announcement comes after Burberry recently confirmed that former boss and chief creative officer Christopher Bailey will step down from the board next year, ending his 17-year stint at the high-end fashion house.
It clears the path for Mr Gobbetti to stamp his mark on Burberry, as he also embarks on an ambitious cost-cutting plan.
He said: “Now is the right time for Burberry to implement the next phase of its transformation.
“By re-energising our product and customer experience to establish our position firmly in luxury, we will play in the most rewarding, enduring segment of the market.
“We have the foundations to build on and the team to execute our plans. This will enable us to drive sustainable growth and higher margins over time, whilst continuing to deliver attractive returns to shareholders.”
The company will take a £15 million restructuring hit linked to the store closures.
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