Burberry to cease production of loss-making exclusive designs for Spain

BURBERRY – the luxury fashion house best known for its black, tan and red checked pattern – has unveiled plans to restructure its loss-making operations in Spain.

The UK firm plans to end production of exclusive collections for Spain and close a facility at Barcelona, which will probably result in 300 job losses.

It said that, with Spain enduring a prolonged economic downturn, it was no longer viable to design and sell collections exclusively for the Spanish market.

It will instead introduce its global collection during the spring and summer 2011 season.

Burberry is set to incur a one-off charge associated with the restructuring of between 50 million (43m) and 70m.

The company said losses are expected in Spain in the 2009-10 year and beyond. However, the firm yesterday said group profit before tax for 2009-10 remains in line with expectations.

Last month, Burberry smashed third-quarter sales forecasts and predicted annual profit towards the then top end of expectations.

Shares in Burberry – which was founded in 1856 and listed on the stock exchange in 2002 – closed up 18p at 636.5p.