Burberry’s newly appointed chief executive, Joshua Schulman, has acknowledged that the luxury brand’s recent struggles were largely self-inflicted as he unveiled an ambitious turnaround strategy to revitalise the loss-making British fashion house.
The heritage brand reported concerning figures, with revenues dropping 22% to £1.09 billion in the six months to September 28, whilst recording a pre-tax loss of £80 million, compared to a £219 million profit in the previous year. These disappointing results were attributed to weakened performance in the United States and Asia, particularly China.
Schulman’s new initiative, dubbed ‘Burberry Forward’, emphasises a return to the brand’s core strength in outerwear whilst maintaining its luxury positioning. The strategy includes a £40 million cost-saving programme for the current year and targets a return to £3 billion in annual revenue, though no specific timeline was provided.
The American executive, who previously led Michael Kors and Coach, dismissed speculation about repositioning Burberry as an accessible luxury brand, though he indicated plans for a broader price range in certain categories, particularly leather goods. The announcement sparked investor confidence, driving shares up by 136½p, or 18.7%, to 868p.
A key focus of the revival plan addresses internal structural issues, with Schulman noting that creative director Daniel Lee had been operating in isolation from the wider organisation. The new strategy aims to foster greater collaboration between design, marketing, and product teams to enhance brand cohesion.
Despite ongoing challenges in mainland China, Schulman remained optimistic about the market’s potential, describing current difficulties as cyclical and expressing confidence in the resilience of Chinese consumers. The company also faces additional pressure from recent UK budget changes, with Chief Financial Officer Kate Ferry warning of a £3 million to £4 million impact from increased employers’ national insurance contributions.
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