Burberry to cut jobs in Britain and Spain

Luxury goods group Burberry beat third-quarter revenue forecasts, helped by heavy discounting, and said it would cut around 540 jobs in Britain and Spain to protect profit in tough trading conditions.

The 153-year-old maker of upmarket raincoats and handbags said yesterday revenues rose nine per cent at constant exchange rates to £329 million in the three months to December 31.

This compared with first-half growth of 13 per cent and forecasts of £270 million to £298 million, according to a Reuters poll of nine analysts.

Burberry said full-year adjusted profit would be in line with guidance it gave in November and that around £50 million of cost cuts would underpin profit between this year and the following year.

Retailers across the world are struggling as consumers cut spending amid fears of a deep recession and job cuts.

Richemont, the Swiss group behind Cartier jewellery, missed third-quarter sales forecasts on Monday, while German retail giant Metro unveiled a cost cutting plan yesterday.

Burberry, known for its camel, red and black check, said like-for-like retail sales fell three per cent in its third quarter.

Burberry said it planned to cut 250 jobs in its underperforming Spanish market, and close a sewing plant in Rotherham, northern England, resulting in up to 290 job losses.

Production and investment will be focussed in nearby Castleford, where Burberry's iconic trench-coats are made.

The group, which has 116 stores, 253 concessions and 76 franchised stores across the world, said the cost of its restructuring plan would be up to 60 million.