Burberry cutting product offerings as profits fall
Burberry is cutting back on several product lines in order to focus on new ranges.
The British luxury brand will cut 15-20 per cent of its product lines, after reporting a 24 per cent drop in first-half underlying profit on Wednesday (09Nov16), in line with expectations.
Burberry, best known for its signature trench coat and scarves, has been impacted by dwindling tourism spending in Europe and tougher trading in the U.S. and Hong Kong.
The brand, helmed by Chief Creative and Chief Executive Officer Christopher Bailey, will now focus on core products and new ranges as it heads into the Christmas period. Among its current bestsellers is the new satchel-style Bridle bag from its September runway show, which is priced from $1,440 (£1,200).
Burberry said in February it would move away from the traditional model of presenting seasonal ranges months ahead of their appearance in store, in favour of a see now, buy now model which means clothes will be available to buy in shops immediately.
"In May we outlined plans to evolve how we work as a business and to drive Burberry’s future growth in a rapidly-changing luxury environment," said Bailey in a statement. "Since then, we have made good early progress towards realising the significant opportunities ahead of us, as we begin implementing our five strategies. We remain on track to deliver our financial goals."
Burberry, which has released a short film about its founder Thomas Burberry as its Christmas campaign, reported adjusted pre-tax profit of £146 million ($182 million).
In their financial report, Burberry said it’s on track to meet its financial goals for the coming year.
The company is looking to save at least £100 million, or $124 million, by 2019 as it aims to outstrip luxury sector growth going forward. Burberry added that retail/wholesale profit for the full year should benefit further from the shrinking British pound, getting a £125 million, or $155 million, boost based on 31 October exchange rates.