- Prachi Singh |
Given the ongoing escalation of the COVID-19 pandemic, Burberry Group plc has said in a statement that since 24 January 2020, trading has deteriorated significantly with comparable retail store sales tracking between negative 40 percent and negative 50 percent over the last six weeks. The company witnessed sales losses in February predominantly in the Asian markets. The company added that while trading in Mainland China has started to improve with the reopening of most of its stores, sales in EMEIA and the Americas have fallen materially in recent weeks.
“Since our February update, the material negative effect of COVID-19 on luxury demand has intensified and is now impacting the industry in all regions. We are implementing mitigating actions to contain our costs and protect our financial position, underpinned by our strong balance sheet,” said Marco Gobbetti, Chief Executive Officer of Burberry.
More than 60 percent of the brand’s stores in EMEIA and around 85 percent in the Americas are currently closed with those still open operating with reduced hours and with very weak footfall. In total, around 40 percent of Burberry’s directly operated stores globally are closed with additional closures expected over the coming days.
Following the significant escalation of governmental trading, travel and social restrictions in recent days and the inevitable impact this will have on demand, Burberry expects comparable retail store sales in the final weeks of the year to be within the range of negative 70 percent to negative 80 percent and as a result, anticipates Q4 2020 comparable retail store sales to be around negative 30 percent.
The company further said that it has significant financial headroom including liquidity of 0.9 billion pounds from 0.6 billion cash balances and a 0.3 billion pounds revolving credit facility.
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Picture courtesy of Burberry