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Burberry to Close Factory

Burberry has decided to shutter its factory in Treorchy, Wales, because the plant is no longer commercially viable.

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LONDON — Burberry has decided to shutter its factory in Treorchy, Wales, because the plant is no longer commercially viable.

The factory, which has been in operation since 1939, will close on March 30. It employs some 300 workers and produces polo shirts. The company said in a statement Wednesday that it had tried to find alternatives to the closure but to no avail.

Last fall, Burberry had revealed plans to close the factory and began negotiations with the unions. Since then, actors Emma Thompson, Ioan Gruffudd and Rhys Ifans voiced their opposition to the closure. Peter Hain, British Prime Minister Tony Blair's secretary of state for northern Ireland and Wales, appealed to Burberry chief executive Angela Ahrendts to reconsider the proposed closure. Even the Church of England, which holds a $4.9 million stake in the company, weighed in, asking Burberry for a formal explanation.

Michael Mahony, Burberry's director of commercial affairs who has been in charge of the planned closure, told WWD Wednesday that Burberry had little choice but to close the plant. During a worldwide sourcing review begun in September 2005, "We found the costs of producing the polo shirts offshore were substantially lower than the costs in Wales. In fact, they were less than half," he said.

"Obviously, no one ever wants to walk into work in the morning and close a factory employing 300 people. But we had to act upon what we'd found," Mahony added.

He said it's important for Burberry to remain in Britain, where the company employs 2,000 people. He added that Burberry had created 500 U.K. jobs in recent years. "We are a very strong British company, and we feel we represent the essence of British design," he said.

Burberry, he added, planned to keep open its two Yorkshire factories, which produce outerwear and the company's famous trenchcoats. He said the Yorkshire factories are different from Treorchy in that "the nature of the product is different: Trenchcoats are more complex, and they command a higher price point."

Mahony said the company was doing its best to cushion the impact of the closure for the Treorchy workers. Burberry has offered them "substantially enhanced" redundancy packages and provided comprehensive outplacement and training services. About 20 percent of the workforce have already found new jobs.

Burberry currently sources and manufactures its products around the world: Two-thirds of the manufacturing takes place in Europe, mainly Britain, Italy and Spain. Mahony said only a small part of production takes place in China.