Burberry has revealed a new strategic plan to address recent financial setbacks.
- A significant 20% dip in revenue was reported for the six months ending in September.
- The luxury brand faced a £41m operating loss, contrasting with last year’s £223m profit.
- A cost-saving initiative and suspension of dividends are key components of the turnaround.
- Burberry aims to realign its core strengths and stabilise its market position.
Burberry’s recently appointed CEO, Joshua Schulman, has unveiled a detailed plan aimed at revitalising the struggling luxury brand. This comes on the heels of a notable decline in financial performance, with a 20% drop in revenue reported for the six months ending 28 September. Both the retail and wholesale segments have underperformed, contributing to an operating loss of £41m, a stark contrast to the £223m profit from the previous year.
The second quarter financial results echoed the difficulties of the first, with comparable store sales diminishing by 20% year-over-year. This decline is partly attributed to several challenges, including pricing strategies in leather goods, which, according to Burberry, have not always been consistent with their market leadership in this category.
Schulman’s new plan aims to address these issues by re-focusing on Burberry’s core areas of strength, such as its renowned outerwear and scarves. Moreover, the company intends to realign its pricing, particularly for leather goods, to better match its category leadership. Schulman emphasized the need for a clear framework to reignite brand appeal, enhance performance, and generate sustainable long-term growth.
In addition to strategic realignment, Burberry has introduced a £40m cost-saving programme and suspended dividends for 2025. These efforts are geared towards streamlining operations and restoring profitability. Schulman expressed confidence in the strategy, highlighting Burberry’s mix of heritage and innovation as core strengths. “My first few months have reaffirmed my belief that Burberry is an extraordinary luxury brand, quintessentially British,” he stated.
Schulman acknowledges the brand’s recent underperformance, linking it to inconsistent brand execution and a lack of focus on core product categories and customer segments. The CEO stressed urgent actions to adjust the company’s course and position Burberry for sustainable growth. Despite financial setbacks, Burberry maintains a strong brand presence among luxury consumers and holds a respected market position in outerwear and scarves.
Burberry’s strategic response to recent challenges reflects a committed effort to stabilise and strengthen its position in the luxury market.
