The £1.5m grant that swung Burberry’s decision to move its services centre to Leeds

burberry

It’s only a minor footnote in the history of Burberry’s ongoing bromance with Leeds, but hey, I didn’t know how this stuff worked before this morning, so I thought I’d share it in case anyone else was interested.

It turns out that when Burberry were looking to cut costs by consolidating their business services operation in a new centre outside London, they had two options in mind, Leeds and Krakow in Poland.

The Krakow option was going to cost the international luxury brand £3.8m less than the Leeds one. So Burberry asked the powers-that-be in Leeds for £1.5m towards the overall project cost of £17.7m, and made an application for that amount to West Yorkshire’s regional public funding bodies.

According to papers released recently by the West Yorkshire Combined Authority (WYCA), the application made it clear that “without a grant of £1.5m the project would not take place within the proposed location”.

“If the grant application is not approved it is unlikely that the scheme would be
located in Leeds, and would instead be located in Krakow,” the papers add.

 

burberry-fall-winter-2014-campaign-photos2

The reason they wanted the money was not just to narrow the cost gap between the two competing locations, but to “demonstrate to the organisation’s (Burberry’s) board that Leeds City Region is supportive of the company’s investment plans”.

Oh, and Burberry needed a decision pronto too.

So, no pressure, then.

The application – code-named “Project Primrose” to keep the applicant’s identity under wraps – was duly pushed through the system at speed in March and April, with final approval delegated to the WYCA’s managing director.

He gave it.

When Burberry made their announcement at the beginning of May, Leeds council leader Judith Blake said it was “hugely exciting that we are the clear choice for Burberry to locate their newly-created shared service centre.” (ed: my emphasis)

Whether Leeds would have been “the clear choice” if we hadn’t coughed up the necessary £1.5m in double quick time is probably debatable.

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5 Responses to The £1.5m grant that swung Burberry’s decision to move its services centre to Leeds

  1. C Green says:

    Another case of big money moving to Leeds and the powers that be giving them everything they ask for, just like John Lewis did. I must say though that the Grant was probably worth it to keep the business in the U.K… shame Brexit has happened as all this might be in doubt now. But at least we will still have the Comnercial pub that the council were going to allow to be demolished unnecessarily.

    • Hadn’t realised the Commercial had been saved. There’s something a bit unseemly about these kinds of transactions involving public money. Why can’t they just move if they want to?

      • cnosni says:

        I agree to a point but if it means that we see the proposed move of Burberrys Uk production to Holbeck then the proposed development could well kick start the other developments in the area which have attained certain degrees planning permission but seem to be on hold.

      • Don’t think the services centre and the production site in Holbeck (the deal for which hasn’t been signed yet) are linked. The new Burberry CEO takes over at the beginning of next month. Leeds will be on his to-do list, but how high up is anyone’s guess. If it happens, it could kick-start other stuff, I agree.

  2. smylers says:

    Thanks for the explanation: interesting to learn how this stuff happens.

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