Burberry is going it alone. The British heritage brand announced that it would not accept government aid during the coronavirus pandemic lockdown. In addition to its public pledge to maintain employee salaries (even for those unable to work remotely), the label also announced that the company’s top executives would be taking a 20 percent pay cut from April through June.
“While we continue to take mitigating actions to contain our costs and protect our financial position, we are also committed to safeguarding jobs and supporting the relief efforts during this global health emergency,” CEO Marco Gobbetti told WWD. The refusal of UK government aid is especially meaningful given that a third of the brand’s employees are based in the UK. The national government has made an effort to stem layoffs by offering companies to pay up to 80 percent of worker salaries (up to £2,500, or about $3,000, per month).
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Burberry has joined the ranks of #luxury brands eschewing government support to negotiate the current retail crisis. The company has warned of a dire #sales slump as a result of store closures but is continuing to maintain salaries for all its employees without the support of government aid in the UK, where a third of its workforce is based. French luxury players including Chanel and Hermès have also previously said they will not tap state aid in a spirit of “national solidarity.” While Burberry’s employees will continue to receive full base pay, its senior leaders and board of directors are taking a voluntary pay cut of 20 percent from April until June. Keep up to date with the latest developments on how Covid-19 is impacting the industry on the BoF Coronavirus Liveblog [Link in bio] 📷: @gettyimages
According to the brand, the pay cut taken by its leadership team will see an equivalent amount transferred to the Burberry Foundation Covid-19 Community Fund. The initiative was established in early April so employees could help various communities worldwide most affected by the virus. That money will complement donations Burberry has made toward vaccine research and the distribution of personal protection equipment (PPE) to medical professionals on the frontlines. Burberry has even retrofitted its factory in Yorkshire––normally used to make its signature trench coats––to produce desperately needed PPE.
The philanthropic work doesn’t mean the brand has no cause for concern. Representatives for Burberry told WWD that it was examining costs carefully and actively looking to reduce spending in “non-essential” areas, though specifics were not disclosed. All of the financial upheaval has caused the luxury label to delay revealing its 2019-2020 financial results to May 22 rather than its original May 14 slot. The brand reportedly made the move to give overworked auditors more time, but it will also give the brand a just a little more wiggle room as it plans for recovery.