// Burberry hands back a £300m CCFF loan to the Bank of England
// It also agreed to pay the HMRC around £6m in support from the one year business rates holiday
// Burberry is the first non-essential retailer to hand back its business rates relief, and the 14th overall
Burberry has reportedly volunteered to repay more than £300 million in Covid financial aid to the Bank of England and HMRC – making it the first non-essential retailer to do so.
According to The Sunday Times, luxury fashion brand and retailer handed back a £300 million loan to the Bank of England, which it received as part of the bank’s Covid Corporate Financing Facility (CCFF) scheme.
Meanwhile, real estate advisory firm Altus Group said Burberry has also agreed to pay the HMRC around £6 million in support it automatically received through the one-year business rates holiday designed to help retailers negate the economic impact of the pandemic.
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It comes after Burberry enjoyed strong trading over the crucial Christmas quarter, with a 50 per cent surge in full-price online sales while demand more than doubled in China – one of its core markets outside the UK.
The financial performance over the golden quarter helped to offset a nine per cent year-on-year decline in Burberry’s physical store estate, which have been impacted by lockdowns and other restrictions around the world.
Burberry borrowed from the CCFF during the first lockdown last spring, when credit markets seized up amid the global Covid-19 crisis.
The CCFF was created by the Bank of England and the Treasury as a cash lifeline for strategically important British businesses that had investment-grade credit ratings before the pandemic.
Meanwhile, Altus Group estimates that Burberry received a business rates holiday worth £5.85 million for the 2020/21 financial year for its six standalone stores and three outlets in England and Scotland.
Of that total estimate, £2.72 million worth of relief was given to Burberry’s 3330sq m flagship store on New Bond Street, London.
“We believe this is the right thing to do in the context of our improved third quarter trading performance and financial stability, secured through rigorous cash management and the introduction of long-term funding via our sustainability bond,” Burberry said.
Burberry is thought to be the first non-essential retailer and 14th overall to agree to return the business rates holiday relief to the government.
The other 13 other retailers that have pledged to do the same are all classified as essential, such as the Big 4 grocers, and have been allowed to keep their bricks-and-mortar shops open during the lockdown.
There has been constant calls by retailers, trade bodies and opposition politicians over recent weeks for Chancellor Rishi Sunak to give businesses in England certainty by confirming an extension to the business rates holiday, which ends on March 31.
“The Chancellor has to avoid a cliff-edge through withdrawing reliefs too early but he also cannot risk repeating the mistakes of the past where support was arbitrary rather than targeted to those most in need,” Altus Group head of property tax Robert Hayton said.
Retail Gazette has contacted Burberry for further comment.