Burberry Group Plc’s Efforts to Fight Against Covid-19 Crisis

Novel coronavirus has impacted businesses across the world; there is affected any industry which has not been due to outbreak and lockdown imposed by the different governments. In the UK, the government has announced several measures to protect the businesses from the collapse and their employees not losing their employment due to this catastrophe. Various companies have applied for Coronavirus Job retention scheme. The UK’s chancellor, Rishi Sunak had sometimes back announced that more than 0.14 million companies in the UK, applied for the UK government’s coronavirus furlough scheme on the very first day of the scheme. The chancellor emphasised that the UK government, on its part has made all efforts to protect the jobs in danger. In the plan, the employers are allowed to lay off the working staff for a few months and then claim 80 per cent of their salary from the government. To support the workers and companies, the UK government has announced various other programmes as well. Like the Coronavirus Business Interruption Loan Scheme – In this scheme, the government will support the companies with £330 billion of loans via Bank of England. This scheme also includes £5 million in loans to small businesses for six months without any interest. Small business coronavirus cash grant, which has been hiked from £3,000 to £10,000. Hospitality firms and small retailers etc. will be eligible for up to £25,000. Retail has been one of the most impacted sectors, and many retail companies such as Acarida group and Marks & Spencer have got benefitted with these schemes, by furloughing their staffs, which provided 80 per cent of employees' salary (up to £2,500 every month).

While many of the companies are going for the government announced schemes, there are various companies who are not relying on the government aids and are building trust among the people and employees. For this, they are taking many steps, whether it is related to seniors pay cut, bonus cut or donating money to fight against novel coronavirus epidemic.

The latest in the list is the international luxury goods manufacturer company, Burberry Group Plc, which has declared a 20 per cent cut senior’s pay from April 2020 through June 2020. It has also agreed to donate equivalent cash to the Burberry Foundation COVID-19 community fund to support societies, stressed with the effect of coronavirus pandemic. The company has also stated that it would not depend on the government's scheme related to coronavirus job retention for those workers who are not able to work due to novel coronavirus emergency.

In the latest announcement, the Chief Executive Officer of the company, Marco Gobbetti stated that the company's primary effort is care and safety of its staffs, consumers and community. The company is aggressively taking different steps to reduce costs and safeguard financial position. He further said that the company is committed to saving jobs and providing help during this health crisis spread across the globe.

Over a century and a half old company, Burberry Group Plc had already updated in March 2020 that the sale of the company would decrease to around 30 per cent and it is taking various steps to reduce expenditure on non-essential parts. The stores of the company in the UK had been closed due to government order of entire lockdown to stop the spread of novel coronavirus, which would have a severe effect on its operations and profit. However, the company has a presence in around 44 nations of the world, but only south Korea and china stores have restarted so far.

Furthering its support to deal with the COVID-19 crisis, the company said its Castleford's trench factory is now producing non-surgical dress for the health care staffs and will deliver them to the UK National Health Services. It is also arranging surgical mask via its supply chain and would be given to the National health services as well as to Marie Curie, which offered nursing care for families living with deadly illness in the United Kingdom. Till now, the company has provided over 10,000 pieces of personal protective equipment.

Overview of Burberry Group Plc

Burberry Group Plc (LON:BRBY) is a luxury fashion company. It is an internationally recognised brand which has 163 years of legacy. The company has several self-owned and franchised stores, which help it to deal with luxury consumers throughout the globe. The company produces high-quality products and support welfare with growth. Over more than 10,000 employees support the company globally. Burberry is listed on the London Stock Exchange and is a constituent of FTSE 100 Index.

BRBY – Share Price Performance

(source: Thomson Reuters)

On 24th April 2020, Burberry Group Plc’s stock closed at GBX 1,291.0. The company’s stock was down by GBX 48.50 or 3.62 per cent as compared to the prior day closing price of GBX 1,339.50. In last 52-weeks, the BRBY stock achieved the maximum price of GBX 2,362.0 on 17th July 2019, whereas the company’s shares posted the lowest price of GBX 1,017.0 in the last 52-weeks on 19th March 2020.

Other major companies who have cut their bosses pay amid novel coronavirus outbreak

As per media reports, there are around 25 UK CEO’s who have got their salary reduced by 20 per cent. However, there are many who went a step further reducing their salary by more than 30 per cent, some of them are-

• The CEO of the Rentokil Initial Plc’s has gone for a salary reduction of 35 per cent and donated the remaining in the employment fund.
• ITV Plc’s chief executive Carolyn McCall with other directors will take a temporary cut of 20 per cent of their salary and would forgo their bonuses for the year 2020.
• The boss of state-backed RBS, Alison Rose has slashed around 25 per cent of salary with all the bonus.