Burberry, the renowned British trench coat maker, has named Joshua Schulman as its new chief executive, replacing Jonathan Akeroyd. This leadership change comes as the company’s latest attempt to move upmarket falters. Jonathan Akeroyd is stepping down after less than two-and-a-half years at Burberry, with his tenure marked by a significant decline in the company’s share price, which nearly halved since he took charge in April 2022. Following the announcement, Burberry’s shares fell more than 10 percent in early London trading.
Financial Challenges and Strategic Shifts
On Monday, Burberry also suspended its dividend, citing a continued slowdown in luxury sector sales that has persisted into July. The company warned that if the current trend continues, it expects to report a loss for the first six months of the year and a full-year profit below expectations.
In response to the challenging luxury market, Burberry is scaling back its plan to target high-end customers and will now focus on less affluent consumers. The company’s efforts to reposition itself as a high-end luxury brand have not yielded the desired results.
Leadership and Creative Direction
Burberry has experienced considerable leadership and creative changes in recent years. Most recently, designer Daniel Lee was hired in October 2022, shortly after Akeroyd joined. Akeroyd and Lee aimed to emphasize Burberry’s “Britishness” with a renewed focus on outerwear and rainwear and introduced a new heritage-inspired logo. However, this strategy did not succeed in revitalizing the brand.
Burberry’s struggles date back to the departure of Angela Ahrendts, who was credited with reviving the brand. Her successor, Christopher Bailey, took on a dual role as CEO and chief creative officer, a move that angered investors. Italian Marco Gobbetti was then hired to replace Bailey and attempted to elevate Burberry by increasing prices and focusing on handbags and leather accessories. Gobbetti brought on Riccardo Tisci, known for his work at Givenchy, but Tisci’s tenure did not reignite demand for Burberry products.
Market Challenges and Future Plans
Chairman Gerry Murphy acknowledged the difficulties facing the luxury market, stating, “The luxury market is proving more challenging than expected.” He added that Burberry is taking decisive action to rebalance its offerings to be more familiar to its core customers while delivering relevant newness.
Financial Performance
For the 13 weeks ending June 29, Burberry reported a 22 percent decline in revenue to £458 million ($594 million), with comparable same-store sales dropping 21 percent. These figures underscore the challenges Burberry faces as it attempts to navigate a difficult luxury market.
