Burberry appoints new CEO amidst sales slump

Fashion label Burberry has changed its manager to revive itself in the face of falling sales.

Fashion brand Burberry has made a significant leadership change in a bid to revitalize itself amid declining sales.

Joshua Schulman, the former head of US brand Michael Kors, has been named the new chief executive, replacing Jonathan Akeroyd who is leaving “with immediate effect.”

Leadership Change

The change in leadership comes as Burberry reported a steep decline in sales, impacted by a downturn in demand for luxury goods, particularly in China. Retail revenues fell by 21% in the three months to June 29, signaling significant challenges for the brand.

Strategic Challenges

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Chairman Gerry Murphy described the sales figures as “disappointing,” noting that the luxury market has proven more challenging than anticipated. Under Akeroyd, Burberry attempted to position itself further upmarket, a move that Murphy admits needs rebalancing.

The company aims to reconnect with its core customers while introducing relevant new offerings.

Market Reaction

Catherine Shuttleworth, head of marketing agency Savvy, highlighted that Burberry’s strategy to move higher in the luxury market alienated many core consumers, effectively pricing them out of the brand.

She welcomed the decision to refocus on “everyday luxury,” a move expected to resonate better with Burberry’s traditional customer base.

Joshua Schulman’s Role

Joshua Schulman, who also served as head of Jimmy Choo in London between 2007 and 2012, becomes Burberry’s fourth chief executive in a decade.

His appointment is seen as a strategic move to stabilize and steer the brand back on track. Schulman’s extensive experience in the luxury market is anticipated to aid in this transition.

Financial Measures and Job Cuts

In an effort to conserve cash, Burberry is suspending dividend payments to shareholders for the current financial year.

Chairman Murphy stated that the actions, including cost-cutting measures, would enhance the company’s performance in the second half of the year.

Reports have suggested that hundreds of jobs could be cut, with Chief Financial Officer Kate Ferry confirming that a consultation process is underway, primarily affecting roles in the UK corporate division.

Outlook

As Burberry navigates these turbulent times, the company hopes that the strategic shift under Schulman’s leadership will reinvigorate its market presence and reconnect with its core customers, ensuring a balanced approach to luxury and accessibility.