Burberry is cutting about 15% – 20% of its product lines to work on its newest lines in an effort to attract more shoppers.
According to an article on Reuters UK, Burberry will cut about 15% – 20% percent of its product lines to work on new lines. The brand is doing this as part of an effort to attract more shoppers as profits decline.
Burberry reported a 40% decline in first-half pretax profits. The company said pretax profits for the first half of the year was £72 million ($90 million) compared to £119.5 million last year, according to an article on Market Watch. Adjusted pretax profit fell to £146 million.
Profits have been declining at Burberry and other luxury brands because of slow growth in Asia, a decline in tourist spending in Europe, and competition with cheaper brands.
Burberry announced in February that it would begin showing in season, “see now, buy now” collections, allowing customers to purchase items immediately after shows. The brand also said it would show both men’s and women’s collections together. Doing this moves the brand from showing 4 collections a year to just 2.
CEO Christopher Bailey says the brand has made early progress in its plans.
As for product cuts, Burberry will be cutting 15% – 20% of available products before the holiday season. The brand has been examining products for revenue growth opportunities and says it will reinvent its handbag collection around a new strategy.
The brand also says it has refined a store profiling model to help it better tailor stock to the kinds of customers that visit its stores.
Last month, Burberry reported a 4% decline in sale for the first half £1.16 billion. Sales in Asia declined because of a decline in tourism. Sales in the United States, however, declined because department stores have cut back in orders. The brand has moved away from relying on wholesale orders, though.
Burberry expects full year pretax profits see a benefit of £20 million more than what was announced in September.
Burberry said during the first half it closed 13 stores. It is currently not known how many job cuts came with the store closings.
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