Burberry, the iconic British fashion brand known for its distinctive check pattern, is undergoing a major shake-up in leadership as it struggles to revive itself in the face of plummeting sales. The company has announced the appointment of Joshua Schulman, former head of US brand Michael Kors, as its new chief executive, replacing Jonathan Akeroyd with immediate effect.
The change in leadership comes as Burberry reported a sharp decline in sales, particularly in the luxury goods market, with retail revenues falling by 21% in the three months leading up to June 29th. Chairman Gerry Murphy described the figures as “disappointing” and acknowledged the challenges posed by the luxury market.
Burberry had previously attempted to move upmarket under Akeroyd’s leadership, but the brand’s core customers felt alienated and priced out. Catherine Shuttleworth, head of marketing agency Savvy, noted that the brand had lost focus on its customer base and welcomed the decision to refocus on everyday luxury.
In an effort to save cash and improve performance, Burberry is suspending dividend payments to shareholders for the current financial year and looking at cutting costs, including the possibility of job cuts. Sales in key markets like China and the Americas have seen significant declines, with Asia Pacific sales down 23% and mainland China sales falling 21%.
The appointment of Joshua Schulman, who has a proven track record in building global luxury brands, has been met with optimism by Burberry’s leadership. However, the brand’s shares have continued to decline, falling a further 17% on Monday.
As luxury brands face challenges in attracting aspirational shoppers and navigating economic uncertainties, Burberry is refocusing on its core principles and traditional focus on dressing the elite. The company is hopeful that the changes being implemented will lead to improved performance in the second half of the year.
