Burberry taking time to think through Leeds facility

Models on the catwalk during the Burberry Autumn/Winter 2017 London Fashion Week show at Makers House , London. Photo credit: Victoria Jones/PA Wire
Models on the catwalk during the Burberry Autumn/Winter 2017 London Fashion Week show at Makers House , London. Photo credit: Victoria Jones/PA Wire

Luxury fashion brand Burberry said it is “taking a moment to think through” its plans for a flagship manufacturing and weaving facility in Leeds.

The firm announced in late 2015 that it would move its Castleford and Keighley staff to Leeds’ South Bank. Work on the facility was due to begin last year, set to be completed in 2019.

However, Julie Brown, chief finance officer of Burberry, told The Yorkshire Post that while the commitment “remains” Burberry was thinking through its plans.

She said: “The first thing to say is that we’re very committed to Yorkshire. I was recently seeing our manufacturing facilities in Yorkshire - both the weaving and the trenchcoat manufacture in Castleford. We’re very committed to manufacturing in Yorkshire.

“What we’re doing is we’re just taking a moment to think through our plans because this is a very important project for Burberry and very important that we get it right.”

No new start date on the facility at Temple Works was given by the luxury fashion brand.

Ms Brown added: “The commitment remains, we’re just taking some time to think about what’s right for Burberry. Clearly the Brexit decision and some uncertainty about tariffs etc. does create some uncertainties for all producers in the UK at the moment. We’re looking forward to that being resolved.”

The new facility will replace two existing manufacturing and weaving centres in Castleford and Cross Hills. The plan is for all the teams from Castleford and Cross Hills to move to the new site, bringing all employees together under one roof. The company employs 700 staff in Castleford and around 70 in Cross Hills. The company, which planned an intial investment of £50m, said it would employ more than 1,000 people at the site.

Burberry cheered ongoing “exceptional” trading in the UK as it continued to receive a boost from the Brexit-hit pound.

The group saw global comparable store sales lift 2 per cent in its final quarter to March 31, while total retail revenues over the second half jumped 19 per cent to £1.3bn thanks to the weakness of sterling since the Brexit vote.

The UK was once again its star performer for sales thanks to booming tourist trade as shoppers from the US and Asia have flocked to Britain to take advantage of the plunging pound to snap up luxury goods at a knockdown price.

It said a “continued exceptional” showing from the UK led double-digit sales growth across the Europe, Middle East, India and Africa region, adding that it saw strong demand from both tourists and domestic customers.

A robust quarter in China, where sales rose by a “high single digit percentage”, also helped offset a tougher quarter in Hong Kong and the United States, where sales slid.

The fourth quarter comparable sales rise marks a slight slowdown on the 3 per cent reported in the previous three months, but left overall growth at 3 per cent in the final six months of its year.

Burberry said its second-half sales were buoyed by a strong customer response to its February runway collection and demand for leather goods.

The firm added that double-digit sales growth of leather goods drove an impressive six months for accessories.

Despite the retail sales surge, total revenues fell 1 per cent with the fillip from the weak pound stripped out as it suffered from sliding US sales and its move to destock its beauty range as part of a new partnership with make-up brand Coty.

Burberry said that instability in the UK economy was a concern, as Britain prepares to leave the EU and the PM calling an election yesterday.

Ms Brown said: “Clearly with the election announced yesterday there is a period of instability as we go through Brexit and that’s a concern for any global business. Particularly we’re interested in understanding what the tariffs will be on exports from the UK.”