No deal Brexit could cost Burberry millions of pounds

On the surface the latest quarterly results issued by Burberry were positive, with a one percent rise in comparable store sales.

But these figures are not likely to keep Burberry's investors from Brexit anxiety, as the country edges closer to not achieving a deal with the European Union.

A no-deal Brexit could spell disaster for many companies, big and small, and Burberry is "mitigating actions," its Chief Financial Officer Julie Brown told Reuters.

“If we had a no-deal scenario we would be subject to WTO rules and absent any mitigating actions our duty costs would increase materially, in the low tens of millions of pounds."

“We would ensure that we allocated additional stock to the relevant areas to ensure that customers were not adversely affected, but that would clearly have an impact on the company because we would have to run with higher inventory levels,”

The disruption to the supply chain would be challenging as like many fashion companies, Burberry imports and exports materials, samples and finished goods easily under the current trade scheme between Britain and mainland Europe. Any disruption to the flow of goods or increased tariffs could cost the company millions of pounds.

Burberry manufactures its trademark trenchcoats in Yorkshire, northern England, and sources some other products, such as Italian-made suits, from mainland Europe.