Burberry revealed a significant operating loss of £53m for the 26 weeks leading up to 28 September 2024.
- The luxury brand witnessed a sharp revenue decline of 20%, reaching £1.08bn.
- Retail sales fell by 19% year-on-year to £885m, with wholesale sales dropping 29% to £169m.
- Licensing revenue was the exception, showing a 5% increase to £32m amidst the declines.
- The new CEO Joshua Schulman introduced the ‘Burberry Forward’ strategy to revitalise the brand’s performance.
Burberry, the esteemed British luxury fashion house, finds itself amidst financial turbulence, reporting a striking operating loss of £53m for the period ending 28 September 2024. This dramatic shift from a pre-tax profit of £219m in the same period last year underscores the brand’s current challenges. The overall revenue saw a downturn of 20%, summing up to £1.08bn.
Retail sales have decreased by 19% compared to the previous year, amounting to £885m. In a more pronounced fall, wholesale sales have plummeted by 29%, totalling £169m. Interestingly, licensing revenue bucked the trend, registering a growth of 5%, with revenues reaching £32m.
Burberry attributes these declines to several internal and external factors, citing ‘inconsistent brand execution’ and a ‘lack of focus on our core outerwear category and core customer segments.’
Since assuming leadership in June, CEO Joshua Schulman has provided a renewed vision for the company. He states, ‘Today, we are acting with urgency to course correct, stabilise the business and position Burberry for a return to sustainable, profitable growth.’ Schulman reaffirms the brand’s inherent strengths, including its strong appeal among luxury consumers, and stable sales in outerwear and scarves across vital luxury markets.
In response to these challenges, the brand has unveiled its strategy known as ‘Burberry Forward.’ This plan seeks to enhance pricing strategies, optimise wholesale and outlet presence, and harmonise seasonal fashion with campaigns spotlighting their outerwear expertise. An emphasis on synchronised efforts between Burberry’s commercial and creative teams is pivotal in executing this plan.
Burberry remains optimistic about its future, aspiring to increase annual revenue to £3bn whilst improving margins and strengthening cash flow. Schulman expresses confidence, stating, ‘Building on our strong foundations, I am confident that Burberry’s best days are ahead.’
Burberry is poised for a strategic revival, aiming to restore profitability with a forward-looking approach.
