Burberry has voluntarily agreed to repay around £6m in business support to the Treasury, following the business rates holiday designed to help businesses navigate through the impact of the pandemic.
According to the Sunday Times, the retailer has also repaid a £300m loan from the Bank of England, in a move that “underlines the growing gulf between the corporate haves and have-nots”.
The luxury fashion house, whose stores remain closed amid the third national lockdown, is thought to be the first non-essential retailer to return the relief payment, according to the Altus Group.
It estimates that the group received a business rates holiday worth £5.85m for the 2020/21 financial year for its six standalone stores and three outlets in England and Scotland, including a £2.72m loan for its 3,330 square metre flagship store on New Bond Street.
In a statement to retail Sector, a Burberry spokesperson said: “We believe this is the right thing to do in the context of our improved Q3 trading performance and financial stability, secured through rigorous cash management and the introduction of long-term funding via our sustainability bond.”
According to the Altus Group, a total of £2.2bn has now been pledged to be repaid by 14 large retailers.
The fashion house said that lower sales were attributed to planned reductions in markdown and reduced tourist traffic in outlets. In addition, Covid-19 related store closures averaged 7% in the period, further impacting trading.
Nonetheless, this was offset by a full-price sales growth driven by new and younger clientele. The group also welcomed good strategic progress in the full price sales in leather and outerwear.
In addition, it welcomed a digital full-price sales growth over 50%, with Mainland China seeing triple-digit growth.