British fashion label Burberry's past fiscal year, which ended on 31 March, yielded a lower profit despite higher turnover. CEO Christopher Bailey immediately announced the company would take measures to reignite growth.
Save 100 million pounds
Burberry's pretax profit dropped from 445 million to 416 million British pounds, some 539 million euro, the second profit drop in the past two years. The luxury brand's annual turnover grew slightly compared to the 2.33 billion pounds from last year, up to 2.52 billion pounds (2.61 billion euro). When looking at like-for-like turnover, Burberry did experience a 1 % turnover drop.
"While we expect the challenging environment for the luxury sector to continue in the near term, we are firmly committed to making the changes needed to drive Burberry's future outperformance, underpinned by strong brand and business fundamentals", Burberry CEO Christopher Bailey said when the numbers were published.
Burberry aims to cut at least 100 million pounds' worth of costs over the next three years. About half should come from "significant changes in our ways of working", like pulling about a fifth of its product range and increase focus on its handbags as those have higher margins than other luxury products.