Burberry, renowned for its luxury fashion, faces an urgent need for revitalisation.
- Latest figures reveal a 20% decline in Burberry’s revenue over six months.
- Joshua Schulman, the new CEO, introduces measures to restore brand appeal and financial stability.
- The comprehensive strategy includes a £40m cost-saving initiative and a suspension of dividends.
- Burberry aims to focus on core strengths and corrective pricing.
Burberry, a well-established name in luxury fashion, has reported a significant drop in revenue, with a 20% decline over the last six months. This downturn has resulted in an adjusted operating loss of £41 million, contrasting sharply with a £223 million profit from the same period the previous year. Both retail and wholesale sales have suffered, particularly highlighting challenges in maintaining pricing alignment with the brand’s category authority.
In response, Joshua Schulman, Burberry’s newly appointed CEO since July, has set forth a strategic plan aimed at rejuvenating the brand’s market position. Schulman’s approach is centred on rekindling consumer desire, enhancing performance, and ensuring long-term value growth. He has articulated a clear framework to achieve these goals, expressing confidence in the brand’s potential, stating: ‘Building on our strong foundations, I am confident that Burberry’s best days are ahead.’
A pivotal component of this turnaround strategy is the realignment of Burberry’s pricing, especially in the leather goods sector, to better reflect its position within the luxury market. The fashion house plans to concentrate on its recognised strengths, such as its popular outerwear and scarves, which have consistently shown resilience despite broader market difficulties.
Financial prudence forms another core aspect of the new strategy, with Schulman introducing a £40 million cost-saving programme. This is coupled with a temporary suspension of dividends intended for 2025, emphasising a streamlined operation to bolster future profitability. Schulman’s early observations of the company have reaffirmed his belief in Burberry’s unique blend of heritage and innovation. He noted the brand’s original purpose in weather-protective clothing remains pertinent, underlining the need for precise brand execution and focus on key segments to halt recent underperformance.
In summary, the turnaround strategy is designed to stabilise Burberry’s operations and set the stage for a sustainable return to growth, leveraging the brand’s authority in key categories and its strong international presence.
Burberry’s strategic overhaul, led by CEO Joshua Schulman, seeks to revitalise the brand by focusing on core strengths and financial discipline.
