19th Mar 2020 09:00
(Alliance News) - Burberry Group PLC on Thursday said its sales have "deteriorated" sharply over the past six weeks as the luxury retailer feels the hurt from the Covid-19 pandemic.
Comparable retail stores sales are tracking between 40% and 50% lower since January 24, Burberry explained.
Back in February, Burberry reported 24 of its 64 stores on the Chinese mainland were closed, with the remaining stores experiencing a significant decline in footfall.
Burberry said on Thursday: "While trading in mainland China has started to improve with the reopening of most of our stores, sales in Europe, the Middle East, India, and Africa and the Americas have fallen materially in recent weeks. More than 60% of our stores in EMEIA and around 85% of our stores in the Americas are currently closed with those still open operating with reduced hours and with very weak footfall.
"In total, around 40% of our directly operated stores globally are closed with additional closures expected over the coming days."
Burberry warned that its fourth quarter comparable retail stores sales will fall 30% year-on-year, with the final weeks of the 12 months to the end of March seeing a slump of as much as 80%.
Burberry added: "We are implementing mitigating actions to contain costs and protect our financial position, including renegotiating rents, restricting travel and reducing discretionary spending.
"We remain confident in the strength of our brand and our strategy. Until January 24, the consumer response to the new product was very positive and as such, we are protecting key growth initiatives in preparation for a recovery in luxury demand."
The company also noted that it has "significant financial headroom", with available liquidity of GBP900 million. This consists of GBP600 million in cash and GBP300 million in a revolving credit facility.
The impromptu update from Burberry replaces a trading update which was due to be released in April. The company is penned to release its full annual results in May.
Shares in the company were 0.5% lower at 1,097.50 pence each in London on Thursday morning, having started higher, reaching 1,187.00p. The stock has halved in value over the past month.
By Eric Cunha; [email protected]
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