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Burberry Commits to Keeping UK Staff Paid as Retail Sales Plummet Nationwide

Burberry Group plc has no intention to rely on a government handout for its U.K. workforce, even though more than one-third of its employees call the country home.

Over the past three months, the luxury firm has taken measures to help prevent the spread of the coronavirus and ensure the safety of its employees, while it continues to look at its cost structure and reduce spend on non-essential areas.

“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. I would like to thank our teams for their continued determination and resilience as we continue Thomas Burberry’s legacy of protecting others and caring for the community,” CEO Marco Gobbetti said.

“We will continue to maintain base pay for all employees who are unable to fulfill their roles because of store or site closures,” the company said on Friday.

Senior executives will take a voluntary 20 percent pay cut from April through June. The board of directors will also take a voluntary 20 percent reduction in their base salary and fees throughout the same time period, with the cash to be donated to the Burberry Foundation COVID-19 Community Fund.

Burberry said the fund was established in early April to support communities in need globally and supplements the luxury label’s separate financial donations that help with vaccine research and charities alleviating food poverty. The fashion company is helping to procure personal protection equipment for the U.K. National Health Service and is supporting food banks.

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The company’s trench coat factory in Castleford has shifted to manufacturing PPE for medical workers, and Burberry is also sourcing surgical masks through its supply chain for the NHS and charities such as Marie Curie, which provides nursing care for families living with terminal illness in the U.K.

“To date, we have donated more than 100,000 pieces of PPE,” Burberry said.

Burberry was to post year-end results for the period ending March 28 on May 14, but has pushed the report date to May 22 because of overall challenges due to the coronavirus pandemic.

Sales for the fourth quarter, which includes the timing of the COVID-19 outbreak in the U.K., are expected to be down due to global store closures in its home country and elsewhere in Europe and the U.S. The quarter will also see some impact on its Asian operations due to the virus outbreak in China and parts of Asia beginning in late January, as well as the ongoing protests in Hong Kong that began in mid-summer. Many stores in Asia have begun to reopen their doors.

Across the country, March retail sales fell by 5.1 percent, the U.K. Office on National Statistics said on Friday. Much of the drop was attributed to temporary store closures from March 23 in line with government guidance on curtailing COVID-19’s spread. Apparel sales plummeted “at negative 34.8 percent” in March, when compared with sales data from February. Online sales, meanwhile, hit a record high of 22.3 percent in March as consumers shifted to e-commerce for their purchases following the coronavirus outbreak. Not surprising, food stores saw sales grow 10.4 percent in March as consumers settled in for quarantine.