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Decision to Close Burberry Factory Still Raising Scepticism

Monday 23rd of April 2007 11:45:37 PM

Even though Burberry closed its Polo Shirts manufacturing factory almost two months ago, the manufacturer is being questioned on its decision to do so. In recent reports released by the company, the profits from closing the factory in Treochy, South Whales, UK will not be seen for at least four years. The annual savings is less than 1%.

These numbers have brought up many questions as to why the company decided to close the factory, which only employed about three-hundred people, and why they thought the savings would be so significant. In defence of their decision, Burberry issued a statement which included, “The UK market, continuing to benefit from the group's increased investment during the year, produced strong gains.” The company also went on to say that better products are being produced in places like China, Poland, and Spain.

While Burberry came under much protest from workers, political leaders and celebrities like Charlotte Church and the Prince of Whales, after announcing the closing of the Treochy Factory, the company reports that their profits have increased in the last quarter. This is due in part to the opening of four new stores. "Burberry achieved outstanding 20% underlying revenue growth in the second half,” said Angela Ahrendt, Burberry’s chief executive.

Because Burberry is a name that is closely linked to English culture and standards, the decision to close one of three remaining Polo Shirts factories in the UK was considered by some to be a black mark on the company. So far, the repercussions of the closing have been minimal, but it remains to be seen if the company will lose loyal customers over time or if it will be business as usual.

(c)robert van, www.sxc.hu