Burberry has announced a temporary 20% cut to directors’ pay and said it will not rely on the government’s coronavirus job retention scheme for employees unable to work during the Covid-19 crisis.
Marco Gobbetti, the luxury retailer’s chief executive, said he and the rest of the board of directors were taking a 20% reduction in their base salary and fees between April and June. The money will be donated to the Burberry Foundation Covid-19 Community Fund, to help support communities struggling with the fallout from the coronavirus pandemic by supplying personal protective equipment (PPE) and food banks.
“Since the outbreak of Covid-19, our priority has been the safety and wellbeing of our employees, our customers and our communities,” Gobbetti said. “While we continue to take mitigating actions to contain our costs and protect our financial position, we are also committed to safeguarding jobs and supporting the relief efforts during this global health emergency.”
Burberry has retooled its factory in Castleford, West Yorkshire, from making its famous trench coats into manufacturing PPE for medical and care workers. “We are also sourcing surgical masks through our supply chain and supplying them to the NHS and charities such as Marie Curie, which provides nursing care for families living with terminal illness in the UK,” the company said. “To date, we have donated more than 100,000 pieces of PPE.”
The group, which warned last month its fourth-quarter sales would be 30% lower because of the pandemic, said it was continuing to look hard at its cost base, reducing spend on non-essential areas.
While many UK companies have utilised the government’s furlough scheme, which pays employees 80% of their salary, Burberry said it would not rely on government support in the UK, where more than a third of its workers are based. The workers who cant work are being paid in full by Burberry. The business employs around 10,000 people worldwide.
All Burberry’s UK stores are closed as part of the country’s lockdown to stem the spread of the virus.
Rupert Neate is the Guardian's wealth correspondent, covering the super rich and inequality. Click here for Rupert's public key