Burberry to delay new UK coat factory following Brexit

Burberry is to delay the opening of a UK manufacturing site that is to produce and weave it's iconic trench coats. The British heritage brand, which this week dominated the fashion headlines after its corporate shake-up of appointing Marco Gobbetti to replace Christopher Bailey as chief executive, said it will put the project on hold for the foreseeable future.

In November last year Burberry announced it was to open a manufacturing site in Leeds, creating over 200 new jobs as two of its existing sites in Castleford and Keighley were to close and its existing workforce of 770 staff to be relocated.

The project, which is to see an investment budget of 50 million pounds, is to renovate a Grade I listed Temple Works building that requires extensive renovations.

Companies are hesitant to invest following Brexit

According to Reuters and the Financial Times, the project is on hold following the Brexit vote, as corporate confidence has dropped and companies are careful to invest without fully understanding any potential economic risks after the referendum outcome.

“We’ve certainly put it on hold for the moment, but that might be for a very short period of time,” Burberry chairman Sir John Peace told reporters at the company’s annual meeting on Thursday. “It depends on how events unfold. It’s not in terms of reversing our decision to do it or not. But it’s the speed at which we invest.”

Economist have warned initial consumer spending would remain relatively the same post Brexit, rather it was businesses who will put off investing, waiting for the bigger picture to emerge. This means companies may be more hesitant to take on more staff, as recruitment and capital spending are two areas of uncertainty.

As the pound as fallen against the dollar and the FTSE 250 remains down, there is turmoil in the financial markets and growing evidence that the economy is slowing, according to the Economist. The impact of Brexit cannot be fully measured because it takes time to collate data and it will be at least six to twelve months before the full economic impact can be understood.

Photo credit: Temple Works, Google, Burberry website