Sunday 23rd Oct 2016 - Logistics Manager

Burberry cuts inventory by 36 per cent

Luxury goods retailer Burberry cut the inventory in its supply chain by 36 per cent last year despite a nine per cent increase in retail space.


The company launched a global cost efficiency programme in January last year which has resulted in savings of almost £50m in the year to 31st March.

It said: “Tighter assortments, improved planning and the global buy initiative all helped reduce year-end inventory by 36 per cent to £167m. Enhanced replenishment and assortment processes contributed to gross margin improvement.”

The retailer has also been rolling out SAP. The European distribution hub was converted in April 2010 and the ERP system was deployed in the US in April 2009 and Korea and others parts of Asia in May 2010. About 90 per cent of retail stores are now on SAP.

Burberry plans to invest some £130m in the business over the coming year including further supply chain improvements and support for expanding its digital commerce activity. It is also planning more new stores, with the increase largely outside traditional regions.

Adjusted operating profit rose 22 per cent last year to £219.9m on sales up seven per cent at £1,279.9m.