Spanish Business News

Fashion house Burberry plans to close its Spanish design facility and cut 300 jobs in Barcelona, as Spain's economic woes mean it no longer pays to produce an exclusive range of clothes for the country.

The closure of the unprofitable unit also fits into Burberry's long-term strategy to amalgamate the licensed businesses it once had around the world into a single global brand.

Burberry will stop producing a local collection for Spain after the autumn/winter season this year, and close the site in Barcelona where the range is designed and produced, resulting in the job losses.
 
The plant closure and redundancies will cost between €50m (£43m) and €70m, Burberry said.

The clothes sold in Spain cost about 25pc less than the Burberry brand sold in the rest of the world. Burberry is now in talks with Spanish retailers over which shops will carry the more expensive global brand as a replacement for the local one. Department store chain El Corte Ingles is one of its biggest customers.

Spain accounts for about 9pc of Burberry's sales, but the company said it expects its operations in the country to make a loss this year and in the near future.

Under a process started by its previous chief executive, Rose Marie Bravo, Burberry brought back licensed businesses under central control. It had two lines in Spain, Thomas Burberry, which closed last year, and Burberry Spain. But with the Spanish economy in recession for almost two years and 20pc unemployment, it was no longer worth running the separate line.

Source: The Telegraph