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British fashion luxury label Burberry said Wednesday that it plans to cut around 500 jobs, 5% of its global workforce, and warned that second-quarter revenue would be hit by the coronavirus pandemic.
The cuts would include 150 people in office roles in the UK. A spokesperson told Business Insider the company wants to “redeploy a number of those impacted” to reduce redundancies.
The company said it hoped to reduce costs by £55 million ($69 million).
Burberry, which is best known for its iconic trench coats, posted a 45% sales decline on Wednesday for its first quarter, which ended in June. Sales dropped across all of its product lines in the quarter, reflecting the impact of coronavirus-related store closures.
Retail sales fell 75% in Europe and the Middle East, 10% in Asia Pacific, and by 70% in the Americas, its trading update showed.
However, the brand saw a revival in sales in Mainland China and Korea in June, where it launched new products after travel restrictions eased.
“We expect it will take time to return to pre-crisis levels with the resumption of overseas travel,” CEO Marco Gobbetti said in a statement.
“We are sharpening our focus on product and making other organizational changes to increase our agility and generate structural savings.”
Based on its performance in June, Burberry said it expects retail sales to decline by between 15% and 20% in the second quarter.
As part of its new product focus, Burberry said last week it would create three new business units covering ready-to-wear, accessories, and shoes.
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