Good point! More irritated by the cynicism of it tbh.
I was thinking whether they’ll have some backlash from PETA etc but nothing so far.
Does anyone know if that 28.6m was cost or retail price? If it’s retail then it might be a few thousand items vs hundreds of thousands of items.
I think I read somewhere that Burberry executives get healthy allowances and discounts on Burberry products, so they could have given more to them…
I reckon they’re using the retail price because it makes a better headline & obviously the margin on perfume is huge..
The FTSE 100 company said last year was unusual as it had to destroy a large amount of perfume after signing a new deal with US firm Coty.
As Coty would be making new stock, Burberry had to dispose of £10m worth of old products - largely perfume.
In accordance with IAS 2, which is an International Accounting Standard for inventory (that’s my accounting degree speaking here if I remember that one correctly), when you write inventory off, it must be valued and reported at the cost of production.
However, I would not think that BBC cares for it, they need drama and £28m is a huge figure if represents cost. I am very much inclined to say they mean the sales value of the products, jsut as @anon2636484 has also indicated.
@saf, a welcome return to the Angela Ahrendts days to refocus the company’s brand proposition perhaps? I am with you, it would be hard to justify a sell off based on a commercial decision seeking to improve overall company performance. Though if you have a strong position on the ethical implications of waste and overconsumption @Freetrade_Team, then I can see why you might want to offload.
A greater concern for me would be a significant slow down in their growth markets stemming from the insanity of a looming trade war. Though could make for a good opportunity to buy in.
The cost of finished goods physically destroyed in the year was £28.6m (2017: £26.9m), including £10.4m of destruction for Beauty inventory.
Thanks so is that at cost or the retail price?
Shall we get Burberry out of the rollout, please?
Seems like the actual cost of production, which means the retail value would be much more. Well, at least they are compliant with the reporting standards!
Think it’s cost value, as in their 200 page Annual Report it’s noted under the Inventories section, and under ‘Accounting policies’ it says:
Inventories are stated at the lower of cost and net realisable value. Cost consists of all costs of purchase, costs of conversion, design costs and other costs incurred in bringing the inventories to their present location and condition.
What was your investment thesis when you bought it? ie has recent news changed the outlook for that thesis?
An interesting brand with global exposure and high quality design IP. Guess that hasn’t changed, but my issue was really the sheer wastefulness of the company.
- They’ll stop burning unsold goods, with immediate effect
- In the future they will no longer use rabbit, fox, mink and Asiatic racoon fur in their collections
Retail sales fell 45% due to lockdown. Wholesale sales down around 50%. They also expect second quarter to be impacted.
Is luxury back in fasion?
Here’s @DavidK diving into the world of personal luxury goods
Capital at risk
Here’s a piece about Burberry’s latest financials and its next pivot. The chameleon of high fashion is about to change again.
“Given that Burberry’s largest target market is in China, it is facing similar conditions to that of its competitors at LVMH in 2017 as it grows out of a Covid environment. Therefore, I am expecting the Supreme collaboration to do the Burberry sales figures wonders.”
I am interested in investing in the luxury clothing/perfume/ “goût de luxe” sector (including buying Burberry shares).
Please, would you know any other Luxury linked brands, funds, ETF or else/similar i could invest in?
Take your time:) and thanks in advance.
Here’s a take on luxury retailers (Burberry, in particular) and whether they’re a hedge during times of inflation Is luxury a hedge against inflation?