by IDG UK staff

Burberry make £50m in saving with SAP

Nov 16, 2009
IT LeadershipIT StrategyManufacturing Industry

Burberryhas saved £50 million in the last year, with an SAP-led efficiency programme.

The implementation is aimed at improving the luxury clothes retailer’s supply chain and logistics, as well as its visibility of store sales and inventory. Nearly half of the saving, £22 million, was delivered in the last six months.

The announcement came as profits at the company fell 20 per cent to £78 million, for the six months to 30 September.

The SAP rolloutis part of an efficiency programme that also includes other IT systems, the closure of six “underperforming” stores, the rationalisation of the company’s own clothes manufacturing, and 1,000 redundancies globally.

SAP was delivering”process improvements” in store planning and stock replenishment, because it was providing “better data” than the company had before, Burberry said in a statement to investors today. The US, responsible for a quarter of sales at the firm, went live with the software in April, and most other large markets are also live.

In May, Burberry said it expected SAP to provide a “long tail” of benefits over time. The implementation is supporting the move to a smaller number of distribution centres, rationalisation of materials suppliers and the move to distribution of goods by sea.

Supply chainsoftware improvements have been particularly targeted at the Spanish market, whose poor performance has dragged on Burberry’s results in recent months.

Angela Ahrendts, chief executive at Burberry, today described the company’s performance in the last six months as “solid”, adding that she was “confident” of its “operational opportunities”.

In other IT news, Burberry is placing laptops in 60 stores to highlight its growing e-commerce site to customers. The company has promised that following the completion of work on SAP, there would be a “reallocation of IT resources” to focus on its e-commerce site, where it had experienced double digit growth, “albeit from a small base”.