Burberry’s new CEO Joshua Schulman has unveiled a strategic plan for the ailing luxury retailer designed to “reignite brand desire, improve our performance and drive long-term value creation”.
The British retailer’s revenue plummeted 20% in the six months ending 28 September, with sales declining in both its retail and wholesale arms.
It made an adjusted operating loss of £41m, a sharp decline from the £223m profit reported in the same period last year.
Burberry’s second-quarter performance mirrored the first, with comparable store sales falling by 20% year-on-year, reflecting ongoing challenges, including price increases, especially in leather goods, which Burberry admitted had “not always aligned with our category authority”.
As part of its new turnaround plan, the fashion house will focus on its core strengths, including its popular outerwear and scarves, while re-aligning pricing, particularly in leather goods, to better reflect its category authority.
Schulman said: “Now, we have a clear framework to reignite brand desire, improve our performance and drive long-term value creation. Building on our strong foundations, I am confident that Burberry’s best days are ahead.”
It has also introduced a £40m cost-saving programme and suspended its dividend for 2025 as part of its efforts to streamline operations and restore profitability.
Despite the tough results, Schulman, who joined back in July, is confident that the new strategy will position the brand for recovery.
He added: “My first few months have reaffirmed my belief that Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation.
“Burberry’s original purpose to design clothing that protects people from the weather is more relevant than ever. Our recent underperformance has stemmed from several factors, including inconsistent brand execution and a lack of focus on our core outerwear category and our core customer segments.
“Today, we are acting with urgency to course correct, stabilise the business and position Burberry for a return to sustainable, profitable growth.
“We have a powerful brand with broad appeal among luxury customers, authority in the outerwear and scarf categories which have remained resilient through this period, and a strong presence in all key luxury markets.”
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