FTSE 100 constituent Burberry Group (LSE:BRBY) is to take a one-off restructuring charge of €50-70 million related to the rationalisation of its loss making Spanish operations. News of the charge made little impact on the company’s share price this morning, which are currently 1.5% higher in a buoyant London market.
The luxury clothing and accessories group said that the continued slump in Spain’s economy had prompted it to cut its exposure in the country. Burberry is planning around 300 redundancies as it closes its down its local collection after the Autumn/Winter 2010 catalogue. Moving forward, its Spanish operations will move over to the group’s global collection from Spring/Summer 2011. Burberry will also close its facility in Barcelona.
“Following this proposal, Burberry will continue to have a strong presence in Spain through its directly-operated stores, concessions and the wholesale channel, profitably distributing the global collection,” the company stated.
Burberry also reiterated that its adjusted profit before tax expectations for 2009/2010 remain in line with market expectations.
In the three months ended 31 December the company achieved 12% underlying sales growth, with total sales reaching £380 million.