Burberry is set on a new course to recover from recent financial challenges.
- Revenue dropped by 20% in the past six months for the retailer.
- The new CEO, Joshua Schulman, has implemented an urgent turnaround plan.
- Focus will be on core products like outerwear and scarves.
- A £40m cost-saving programme has been introduced, and dividends suspended for 2025.
In the face of significant financial downturns, Burberry has embarked on a strategic mission to restore its former glory. The company’s revenue plummeted by 20% over the last six months, marking a stark contrast to its previous financial health. This decline spans both retail and wholesale sectors, resulting in a £41 million adjusted operating loss, which starkly contrasts the £223 million profit recorded in the same timeframe last year.
Under the leadership of new CEO Joshua Schulman, Burberry is implementing an urgent turnaround strategy designed to revitalize the brand. Highlighting the need to reignite brand appeal and enhance performance, Schulman has set a clear framework aimed at long-term value creation. He stresses the importance of building on current strengths, specifically focusing on well-regarded products such as outerwear and scarves, while also recalibrating the pricing strategies for leather goods.
The plan also involves a concerted effort to correct course with urgency. According to Schulman, disconnects in the brand’s execution and insufficient focus on key segments, like its famed outerwear, are being addressed. His strategic vision promises a return to consistent, sustainable growth and profitability. Burberry has a powerful brand presence in all major luxury markets, and maintaining this is central to the turnaround efforts.
To streamline operations and rectify financial footing, the company has also introduced a £40 million cost-saving programme. This financial prudence will be reinforced by the suspension of dividends for 2025, as a means to conserve resources and concentrate on stabilising the business.
Burberry is poised for recovery under a new strategic vision that prioritises core strengths and cost efficiency.
