Burberry has reported an operating loss of £53 million for the first half of 2024.
- Pre-tax losses reached £80 million, a significant drop from last year’s £219 million profit.
- Total revenue fell by 20% to £1.08 billion, with retail and wholesale sales declining sharply.
- CEO Joshua Schulman has introduced a strategic plan named ‘Burberry Forward’ to address the issues.
- Despite setbacks, Burberry remains optimistic about returning to profitable growth.
Burberry, the renowned British luxury fashion brand, finds itself in challenging financial circumstances as it reports an operating loss of £53 million for the first half of 2024. This marks a stark contrast to the same period last year, where the company enjoyed substantial profits.
The brand’s pre-tax losses amount to £80 million, a decline from last year’s £219 million profit. This downturn is reflected in their overall revenue, which has decreased by 20% to £1.08 billion. Retail sales alone saw a 19% drop year on year, falling to £885 million, while wholesale sales experienced a 29% decrease, reaching £169 million. Conversely, licensing revenue saw a slight increase, growing by 5% to £32 million.
Burberry attributes its financial difficulties to several factors. Key among them are what they describe as ‘inconsistent brand execution’ and a lack of focus on their core products, particularly outerwear, which historically plays an important role in their business. The brand also noted a need for better focus on its core customer segments.
Joshua Schulman, who took the role of CEO in June 2024, commented on the urgency required to address these issues. He expressed confidence in Burberry’s brand appeal and reiterated the company’s commitment to making significant changes. ‘Today, we are acting with urgency to course correct, stabilise the business, and position Burberry for a return to sustainable, profitable growth,’ he stated.
The brand’s new strategic plan, termed ‘Burberry Forward’, aims to realign the company’s pricing strategy, optimise its presence in wholesale and outlet markets, and balance its seasonal fashion marketing with a stronger emphasis on its reputable outerwear offerings. This strategic direction also seeks to enhance collaboration between Burberry’s commercial and creative teams. Burberry’s leadership is confident in the potential for recovery and growth in the long term, targeting a return to generating £3 billion in annual revenue while improving margins and cash flow.
Burberry, despite current financial struggles, is taking decisive steps with its ‘Burberry Forward’ strategy to navigate back to profitability.
