British luxury group Burberry named former Michael Kors boss Joshua Schulman as its new chief executive, axeing Jonathan Akeroyd after two years as it warned on profit and scrapped its dividend. A slowdown in the luxury sector has hit Burberry harder than rival brands, derailing the 168 year-old British name at a time when it had been trying to move upmarket, and triggering the latest change at the top of the company.
For the 13 weeks to June 29, underlying sales slumped 21% as the company said weakness in its market deepened. It warned that on current trends it would miss forecasts for annual profit and it would scrap this year’s dividend to invest in growth. Burberry has been in turnaround mode for some time, and under a number of different bosses. Designer Riccardo Tisci exited in 2022 after less than five years. Akeroyd’s predecessor left after four years.
“This is a kitchen sink exercise par excellence, and underscores the enormity of the challenge facing Burberry in a world where Chinese sales can no longer be taken for granted,” Chris Beauchamp, chief market analyst at online trading platform IG said. Schulman was CEO of USA brand Michael Kors from 2021-2022 and before that brand president at Coach.
While some higher end luxury brands like Hermes and Prada have proved to be more resilient, Burberry has struggled. Shoppers in the USA and Europe have grown more cautious as the cost of living has risen, while appetite in China has been deflated by a property crisis and record youth unemployment.
Burberry said it would switch its offer back to be “more familiar” to its “core customers”, with a marketing campaign for outerwear to launch in October. Its last collection departed from its classic camel, red and black check print in favour of bold colours. It said it expected to see an improvement in its second half, and would also find cost savings. Shares in Burberry have lost 57% of their value over the last 12 months, underpeforming Britain’s bluechip index which is up 13%.
