Even companies at the top of the retail food chain are suffering. Luxury brand Burberry is cutting up to 540 jobs (roughly 9% of its workforce) in Great Britain and Spain, despite a 30% rise in revenue at the end of 2008. The fashion label hopes that the cuts will save as much as $50 million a year.
WSJ: Burberry’s decision to cut staff reflects broader troubles among makers of luxury goods, which had hoped to be safe from the hardship elsewhere because of their affluent clientele. But while some, such as Compagnie Financière Richemont SA, owner of glamorous brands such as Cartier and Chloé, have reported sales declines or laid off temporary staff, Burberry is the first to announce cuts to its permanent workers.
Analysts say they expect more cuts to come at other luxury-goods companies. “In the same way that we see a trickle-down effect, in retail, we also see a trickle-up effect,” said Bryan Roberts, global research director at consultancy Planet Retail in London. “High-end players are less vulnerable to the downturn, but that doesn’t mean they are not affected.”
See Also: Chanel Cutting 200 Jobs
Business Insider Emails & Alerts
Site highlights each day to your inbox.