Burberry Appoints Joshua Schulman as CEO as Jonathan Akeroyd Steps down Amidst Declining Sales
Fiona Nanna, ForeMedia News
4 minutes read. Updated 6:11PM GMT Mon, 15 July, 2024
In a strategic move to combat declining sales amidst a challenging luxury market landscape, Burberry has announced the departure of CEO Jonathan Akeroyd, effective immediately. Joshua Schulman, former head of Michael Kors, will step into the role in an effort to steer the iconic British fashion brand back to profitability.
Burberry, renowned for its distinctive camel, red, and black check pattern, reported a significant 21% drop in retail revenues for the quarter ending June 29th. This decline underscores broader struggles in the luxury goods sector, exacerbated notably by reduced consumer demand in key markets like China.
Chairman Gerry Murphy expressed disappointment at the latest figures, acknowledging the luxury market’s unexpected challenges. He emphasized the necessity for Burberry to refocus its strategy, aiming to reconnect with its core customer base while injecting fresh appeal into its offerings.
Catherine Shuttleworth, from marketing agency Savvy, commented on Burberry’s recent strategy shifts, noting that attempts to elevate its brand positioning may have alienated some traditional customers. She highlighted the brand’s need to realign with a focus on “everyday luxury” to regain market resonance.
As part of its restructuring efforts, Burberry has opted to suspend dividend payments for the current fiscal year to conserve capital. The company also anticipates potential job cuts globally as it seeks to streamline operations amidst financial pressures.
The appointment of Joshua Schulman, acclaimed for his success in global luxury brand management, signals Burberry’s intent to revive its fortunes under new leadership. Schulman, who previously led Jimmy Choo and Michael Kors, expressed enthusiasm for the opportunity to helm Burberry, emphasizing its blend of British heritage and innovative spirit.
Despite these strategic maneuvers, Burberry’s shares have plummeted by over 50% in the past year, with a further 17% decline following the latest announcements. Analysts attribute this downturn to ongoing challenges in attracting aspirational shoppers amidst economic uncertainties and shifting consumer preferences.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, highlighted the difficulties faced by luxury brands reliant on aspirational consumer spending, particularly in volatile economic climates. She emphasized the imperative for Burberry to reemphasize its core principles and traditional elite-focused brand identity.
The luxury goods sector’s woes extend beyond Burberry, with other prominent brands like Kering also reporting significant profit warnings amidst declining demand, particularly in critical markets such as China.
Burberry’s leadership transition and strategic realignment underscore the formidable challenges facing luxury brands in today’s global market. With Joshua Schulman at the helm, Burberry aims to navigate these challenges, reaffirming its position as a leader in British luxury fashion.
