Disappointing results for Burberry
American Joshua Schulman, who has experience working at Jimmy Choo, Coach and Michael Kors, will replace Akeroyd after the British fashion house had to admit to dismal quarterly results. Sales fell 22% to £458 million in the first quarter. In both the Americas and Asia, sales fell by 23 percent, while in Europe, Africa and the Middle East, the decline was 16 percent. – reports retaildetail.eu.
The company's chief executive, Gerry Murphy, admitted the results were "disappointing". Burberry, under the leadership of new creative director Daniel Lee, tried to turn things around, but despite a well-received summer collection, it turned out to be "a bigger challenge than imagined". The luxury goods market is cooling around the world, but falling demand in China in particular is hurting luxury brands.
What brand does Burberry want to be?
For Burberry, the challenge is exceptionally great because the brand has been looking for its identity for years. The company balanced between striving for exclusivity and massification. She was also unsure whether to follow the latest trends to reach younger consumers or to market herself as a timeless archetype of British classics. Numerous CEO and designer changes in recent years have turned the luxury home into a sinking ship that doesn't know how to stay on course.
Personnel turmoil does not help restore stability: while Akeroyd was a supporter of premiumization and wanted to make Burberry a more expensive brand, Schulman is expected to go the other way and strive to create a "more inclusive and democratic" Burberry. This indecision is already causing its stock market valuation to decline further, which analysts say could make Burberry an easy takeover target.
