(Bloomberg) -- A Burberry Group Plc reorganization will include job cuts in the British fashion brand's head office that follow a lockdown-induced plunge in sales, according to people familiar with the situation.
The company behind the iconic trenchcoat announced last week that it would consolidate its offerings around ready-to-wear, accessories and shoes as it aims to elevate the quality of its products while becoming more agile. The reorganization is part of a plan put in place by Chief Executive Officer Marco Gobbetti, whose urgency has grown with the onset of the coronavirus pandemic.
The revamp will lead to an unspecified number of job cuts in the London head office, according to people familiar with the situation. Burberry employs just over 10,000 people and did not furlough any of its U.K. staff during the pandemic.
Burberry declined to comment on any potential job eliminations. The reorganization is about ensuring “we have the right structures in place for the next phase of our strategy,” a representative said in an emailed statement, adding that it is “designed to enhance our product focus and enable us to be more agile and more specialized, ultimately bringing us closer to our customer and driving luxury standards.”
The news comes as Burberry is set to report first-quarter sales on Wednesday, with analysts estimating a decline of 49%.
Gobbetti has sought to turn around Burberry with a strategy that includes an expansion of its handbag offerings, a lucrative business for peers like LVMH's Louis Vuitton and Hermes International that's typically been more resilient than apparel during crises.
The turnaround strategy has rested largely on the shoulders of star designer Riccardo Tisci, formerly of French fashion house Givenchy, who joined Burberry in 2018. But the pandemic has hit these efforts, with most of the stores closed since the start of the year.
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