Their employs in UK are around 10,000 people. With the development of luxury industry, the Group focus on creating a leading luxury retail and digital business for the next phase (Zozulya et al., 2015).
According to the annual financial report in financial year 2005 and 2006, Burberry Group improve their capital structure by repurchase the outstanding capital stock?since its capital can be fully utilized and can improve the company’s stock earnings per share at the same time. The capital management balance sheet in 2005 shows the share repurchase program has completed £192 million repurchased in financial year 2005/06, and £12.5 million net cash position at March 2006. What’s more, their ongoing plans shows that share repurchases consistent with capitalization strategy, the capital expenditure is planned to total approximately £50m. The Group has completed £250m share repurchase program with £192m repurchased during 2005-2006. And it achieved targeted cash neutral capitalization, the diluted EPS before costs also increased 9% on a 4% revenue gain. Return on capital for the period was 33%. Further more, in order to encourage employees, share ownership at all levels, the Group offers a Sharesave Scheme. The Sharesave Scheme offers executive directors and eligible employees an opportunity to enter into a long-term savings contract to save a portion of their salary which can be used to purchase Burberry Group plc shares at up to a 20% discount to the market price at the date of invitation.
In the year of 2006, there had a significant financial event that the Burberry has the acquisition of subsidiaries, it acquired a shell company in the Czech Republic On 18 October 2006, it is to enable the Group to buy a lease for a new store. The net asset value of the shell company acquired was £4,197 consisting of cash of £4,095 and a debtor of £102. No adjustments were made to the fair values of the assets. Total consideration paid in cash was £71,727 resulting in goodwill of £67,530. The acquisition of subsidiaries could offer the chance for company to adjust the capital structure, it could help company to narrow the gap to the target ratio of debt and also help to optimize the capital structure. The policy of acquisition not only help to expand the scale of the Group, but also help the list company choosing the suitable financing method to maximize the value of company.
The capital report in annual report 2007-2088 state that the Company has one class of ordinary share which carries no right to fixed income. Each share carries the right to one vote at general meetings of the Company. The ordinary shares are listed on the Official List and traded on the London Stock Exchange. However, the Company repurchased and subsequently cancelled 6,198,167 ordinary shares at an aggregate cost of £39.6m. These share buy backs form part of the Group’s ongoing policy of returning cash to shareholders where funds are not required for investment in the business. In order to retain maximum flexibility, the Company proposes to renew the authority granted by ordinary shareholders at the Annual General Meeting in 2007, to repurchase up to just under 10% of its issued share capital