Luxury brand Burberry said that it would cut about 500 jobs globally, including 150 British-based office roles, as it forecast no quick recovery in demand, particularly from high-spending tourists.

The company announced the layoffs alongside a 45% drop in first-quarter like-for-like sales, reflecting store closures following lockdowns in Europe and the United States and a dearth of long-haul travellers.

Chief Executive Marco Gobbetti said it would take time for demand to return to pre-crisis levels, but he was “encouraged by the improving trends in all regions” and a revival in sales towards the end of June.

Shares in Burberry, which is attracting younger customers in China and other Asian markets with new ranges from designer Riccardo Tisci, were trading down 6% at 1,463 pence.

Citi analysts said like-for-like sales were better than the -49% the market expected, but the outlook for the second quarter of like-for-like sales down 15-20%, a 200-300 point fall in gross margin for the first half and a mid-teens per centage drop in operating costs would put pressure on forecasts.

They said they expected consensus full-year operating profit forecasts to come down by at least 10-15%.

Chief Financial Officer Julie Brown said the sales decline had eased during the quarter as the level of closures decreased to 15% from 60%, led by mainland China, where trading in June was at pre-COVID levels.

Reuters