Latest news with #WealthClub
Bloomberg
29-05-2025
- Automotive
- Bloomberg
UK's Used-Car Demand Boom Spells Bad News for Auto Trader Shares
Auto Trader Group Plc shares slumped on a surprising trigger for the vehicle marketplace's cautious earnings outlook: buoyant used car demand. 'Cars are selling like hotcakes, reducing the need for retailers to buy advertising slots from Auto Trader,' said Charlie Huggins at investment services firm Wealth Club following the Manchester, England-based company's full-year results.
The National
19-05-2025
- Business
- The National
Scotch whisky giant launches £375m cutting drive as US tariffs hit
The owner of Johnnie Walker whisky – as well as Lagavulin, Singleton, and Talisker among others – said it would be impacted by a 10% tariff on UK imports into the US, which were untouched by the UK Government's trade agreements with Donald Trump. It said it believes its current plans will mitigate around half of the impact of these higher costs on its profit and it will work on further measures to offset the impact. However, it reflects an improving outlook after Diageo said in February that it was bracing for a 200 million US dollar (£161m) hit to profits from tariffs. READ MORE: How Donald Trump's tariffs have impacted Scotch whisky – in figures The firm was set to face a significant knock from proposed tariffs on US imports from Canada and Mexico, but was buoyed by an exemption on alcoholic drinks in March. Diageo also stressed on Monday that it will not be affected by tariffs between the US and China. It came as the company launched a 500 million dollar (£375.6m) cost-saving programme, in order to support further investment and improving its leverage. The London-listed firm, which also makes Guinness, Gordon's gin, and Baileys, said it will shift to 'a more agile global operating model' as it seeks to improve its cash flow. Meanwhile, the company reported that net sales grew by 2.9% to 4.37 billion dollars (£3.28bn) for the three months to March 31, amid a boost from continued strong Guinness sales. In Europe, sales dipped 1.3% for the quarter as higher Guinness sales were offset by 'further softness' in spirits across key markets. Organic spirit sales were weaker year-on-year in the region, despite increased demand for tequila. However, sales in North America grew by 5.9% amid strong shipments of US spirits. Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club, said that this was a temporary boost in sales that was explained by people stocking up ahead of Trump's tariffs coming into effect. 'These impacts are estimated to have boosted sales by 4% in the third quarter and are expected to largely reverse in the fourth quarter,' Huggins said. 'Even so, there are some positives for investors to take away from this statement. 'Despite the challenging market backdrop, Diageo has reiterated its full-year guidance. The impact of tariffs appears manageable, for now at least. READ MORE: Co-op board votes to remove all Israeli products from shelves 'In addition, Diageo has launched a productivity programme, aimed at boosting cash flow and margins. This should help get profit moving in the right direction, even if tough trading conditions persist.' Debra Crew, chief executive of Diageo, said: 'In the third quarter we delivered strong organic net sales growth and are on track to deliver on our guidance of sequential improvement in organic net sales performance in the second half of fiscal 2025. 'We also reiterated our organic operating profit outlook for fiscal 2025, including the impact of tariffs based on what we know at this time. 'We continue to believe in the attractive long-term fundamentals of our industry and in our ability to outperform the market. 'We view the near-term industry pressure as largely macro-economic driven, with continued uncertainty impacting both the timing and pace of recovery.'
Daily Mail
15-05-2025
- Business
- Daily Mail
Major UK retailer to axe 1,700 jobs in bid to cut costs
Burberry plans to cut a up to 1,700 jobs worldwide as part of efforts to slash staff costs and return the luxury fashion brand to a profit. The retailer said it was upping its cost-cutting target to £100million of savings per year by the 2027 financial year after posting a £3million reported operating loss for the year to the end of March. It comes as luxury brands around the world continue to struggle against subdued demand, rising costs and economic uncertainty. Burberry said savings will partly come from a reduction in 'people-related costs', the firm said, which could affect around 1,700 jobs globally over the two-year programme. The latest cost-cutting drive would reduce Burberry workforce by nearly one-fifth. The company said the 'organisational changes' were aimed at ensuring Burberry was 'fit for the future'. Burberry shares jumped 6.75 per cent or 55.80p to 882.60p following the update. In the last year, the retailer's shares have fallen by around a quarter. 'Investors have seen several failed turnaround plans from Burberry in recent years. This one feels like a last chance saloon', Charlie Huggins, manager of the Quality Shares Portfolio at Wealth Club, said. Burberry has been battling profit warnings, dwindling footfall and lower sales. It is pinning its hopes on a back to basics approach and plans to focus on its popular trench coat and scarves ranges. Schulman took over last year and shifted Burberry's strategy and marketing to re-focus more on its traditional trench coats and scarves after the brand was bruised by product missteps, excessive price hikes, and a broader luxury downturn. On Wednesday, Schulman unveiled plans for a further £60million of cost cutting on top of £40million already announced, making £100million savings in total over the next two years. The savings will cost approximately £80million to implement. Burberry reported a 17 per cent drop in revenue to £2.5billion for the year to 19 March. It made an operating loss of £3million against a £418million profit the previous year. However, this was much better than the £7million loss forecast by analysts. The group made a pre-tax loss of £66 million for the 12 months to 29 March, compared with a £383million profit in the previous year. Fourth-quarter comparable sales were down 6 per cent, better than analysts' average forecast for a 7 per cent decline. The group said it had endured a 'challenging first half' and warned of a 'difficult macroeconomic backdrop.' But, Schulman said in a statement: 'With improvement in brand sentiment, we will be ramping up the frequency and reach of our campaigns as our Autumn and Winter collections arrive in store.' Sales in the Americas and the Europe, Middle East, India and Africa region both fell by 4 per cent compared with last year, while sales in Asia Pacific were down 9 per cent. Richard Hunter, head of markets at Interactive Investor, said: 'Burberry will want to consign the past year to the history books as soon as possible, when the change of chief executive, suspension of the dividend and first-half loss sent the shares into a tailspin. 'The group responded immediately and decisively, but the new strategy will take time to filter through.' He added: 'Overall, the group is far from being out of the woods, but the immediate impact of 'Burberry Forward' is a highly encouraging sign. 'That being said, the impact of the tariffs, even at the revised lower levels, will need to be closely monitored and there will need to be further proof that the current momentum can be maintained. 'The share price has much ground to recover, having fallen by 29 per cent over the last year as compared to a gain of 0.7 per cent for the wider FTSE 250, and by 67 per cent over the last two. 'While the market consensus of the shares as a hold could indicate some investor reticence to jump on board the turnaround story just yet, the initial share price reaction to these numbers reflects a rare round of applause on the clear progress which has already been made.'
New York Times
14-05-2025
- Business
- New York Times
Burberry to Cut 1,700 Jobs in Turnaround Push
Burberry, the British fashion brand known for its trench coats and signature checkered print, said on Wednesday that it would slash up to 1,700 jobs in a bid to cut costs as it tries to return to profit after a period of poor sales in an increasingly volatile luxury sector. The job cuts, which represent 18 percent of the company's global work force, are part of larger organizational changes that are expected to save the company 60 million pounds. The measures come amid global uncertainty that increased after President Trump imposed tariffs on America's top trading partners. 'The current macroeconomic environment has become more uncertain in light of geopolitical developments,' the company said in a statement. The company announced the cost-cutting strategy after reporting a 117 percent drop in its annual pretax profits in the 2025 financial year, which ended March 29. Operating losses were £3 million, or $4 million, down from a £418 million, or $558 million, profit the year prior. Revenue was down 17 percent to £2.5 billion, or $3.4 billion. Burberry has struggled in recent years after managerial and designer changes, a drive to increase prices that fell flat with customers and the wider global slowdown of luxury consumption, particularly in China, its biggest overseas market. The company said the cost-cutting efforts, combined with earlier measures, could lead to planned savings of up to £100 million, or $133 million, by 2027. Most job losses will hit corporate offices but could also affect retail stores and factories. Shares jumped by as much as 10 percent on the news after the market opened in London. The company's chief executive, Joshua Shulman, joined Burberry from its American rival, Coach, last year to lead a turnaround effort. He said in a statement on Wednesday that he was 'more optimistic than ever that Burberry's best days are ahead and that we will deliver sustainable profitable growth over time,' but added that the last financial year had been challenging. Charlie Huggins, a manager at the investment firm Wealth Club, noted that a 6 percent decline in same-store sales in the fourth quarter was 'a marked improvement' and suggested that 'the strategic plan to reignite the brand may be gaining early traction.' 'But fiscal year 2025 was still an annus horribilis for Burberry, ' he said. 'Almost everything that could go wrong did. Luxury consumers across the globe significantly tightened their belts hitting the whole luxury sector. But Burberry has seen more impact than most.' Other groups that noted earnings declines recently include LVMH, owner of Louis Vuitton and Dior, and Kering, which owns brands like Gucci and Saint Laurent.
Yahoo
14-05-2025
- Business
- Yahoo
Burberry may cut 1,700 jobs globally to reduce costs as profits fall
Burberry has said it could cut 1,700 jobs worldwide by 2027 – including removing the entire night shift at its Yorkshire raincoat factory – as the struggling fashion house ramps up its efforts to slash costs after a tumble in profit. The British luxury brand announced the job cuts on Wednesday after reporting a 117% fall in its annual pre-tax profits in the last financial year. It recorded a £66m loss, down from a profit of £383m, as the company has struggled against a broader malaise in the global luxury goods industry. The company has said a new plan to find £60m in cost savings could affect 1,700 jobs around its global offices. Burberry employed about 9,300 people across the world last year, so the cuts could affect almost a fifth of its staff. Joshua Schulman, the chief executive of Burberry, said most of the cuts would be at the group's head offices around the world – led by London – but jobs would also go by reorganising staff rotas in stores and dropping one shift at its factory in Castleford. He said the change in Castleford, which is expected to affect about 150 jobs, came ahead of a 'significant investment' in the second half of this year in the factory. 'For a long time we have had overcapacity at that facility and that's simply not sustainable at this point,' he said. 'We are making this change to safeguard our UK manufacturing and will be making a significant investment in renovating the factory [later this financial year].' The fashion house, which is best known for its signature trench coats, has struggled in recent years because of a weak luxury market and a difficult brand revamp project. The company hired Schulman, the former boss of the US fashion brand Coach, as chief executive last year in an attempt to revive its fortunes. The new plan to cut costs is on top of a £40m savings programme that Schulman announced in November. Burberry shares bounced by as much as 8.6% on Wednesday morning. Schulman said he was 'more optimistic than ever that Burberry's best days are ahead', although he admitted the first half of the last financial year had been challenging. Overall revenue in its financial year ending on 29 March dropped by 15%, stripping out the impact of foreign exchange rates. Charlie Huggins of the investment broker Wealth Club said the 2025 period had been an 'annus horribilis' for Burberry. 'Luxury consumers across the globe significantly tightened their belts hitting the whole luxury sector. But Burberry has seen more impact than most,' he said. 'Its operational execution has left a lot to be desired in recent years and the brand has lost its lustre, compounding the wider sector's issues.' Huggins noted, however, that there had been some 'tentative signs' of encouragement, with a 6% like-for-like drop in sales in the final quarter of the year, which was not as bad as the 7% drop that City analysts had forecast. A wider downturn in the luxury goods sector has also hit the sales of bigger rivals such as Kering, which owns brands such as Gucci and Balenciaga, and LVMH, which owns Louis Vuitton and Christian Dior. Burberry has lost roughly a quarter of its market value over the past year, while LVMH has lost about a third, and Kering is down by more than two-fifths. Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
