The executive driving the turnround of Burberry Group Plc said tourists are spending more on luxury goods in mainland Europe than the UK following the loss of tax-free shopping for visitors to Britain.
“Unfortunately there is a gap,” said Jonathan Akeroyd, chief executive officer of the British luxury fashion chain, in an exclusive interview with Bloomberg TV. This is “disappointing especially as it’s our home market,” he added, speaking ahead of London Fashion Week.
Visitors from outside the European Union were able to reclaim tax paid on their purchases until January 2021, when the policy expired. Businesses argue the lack of incentive for foreign shoppers is making the UK uncompetitive, with many international big spenders choosing to visit Paris or Milan instead.
Retail businesses in London’s West End have been particularly affected by the loss of the VAT-refund program. Earlier this month the New West End Company, an industry group, said the so-called “Tourist Tax” had hit them harder than the worst inflation crisis in Britain’s history in decades. In April, Burberry’s outgoing chairman Gerry Murphy said the UK had committed a “spectacular own goal” that had put travelers off the UK.
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Burberry is talking to the government and pushing to reinstate VAT-free shopping which would help post-Brexit Britain attract more visitors and spending, said Akeroyd.
“We will keep talking. It’s not just us. There’s a big movement to keep communicating about the frustration of it,” he said.
The former Versace boss took the helm of Burberry last year and is trying to boost the appeal and Britishness of the brand which is best known for its trenchcoats and check patterns. He hired designer Daniel Lee whose debut collection hit stores in September.
Akeroyd said customer’s responses to Lee’s designs had been very positive, adding that the designer has an incredible talent for accessories, a big growth area for the brand.
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Burberry will be holding its latest fashion show on Monday and it’s temporarily rebranded Bond Street tube station into “Burberry Street Station” for the duration of London Fashion Week which runs until next Tuesday.
