In a first-quarter trading call on Monday, Burberry warned investors of an expected operating loss in the first half of the next fiscal year, according to WWD. The British fashion house reported a 22% drop in retail revenue to £458 million GBP in the previous quarter, with overall sales down by 20%. Comparative retail revenue also fell by 21%, starkly contrasting to the 18% increase seen in the same period last year.
Burberry’s Disappointing Results and Future Outlook
The results are disappointing,” said Burberry Chairman Gerry Murphy. The luxury market will slow down further, causing operating loss during the next three months. He failed to give an exact figure of probable loss.
Share Drop and Strategic Focus on Core Customers
On Monday, Burberry’s shares dropped 16% to £7.40 GBP after Murphy announced the suspension of dividend payments. While the brand’s price increases under Daniel Lee have alienated some customers, Murphy focused on becoming “more familiar to Burberry’s core customers while delivering relevant newness.” A new campaign set to launch in October aims to address these goals.
Executive Team Overhaul and New Leadership
Due to falling sales, Burberry has been restaffing its management. Joshua Schulman is to replace Jonathan Akeroyd as CEO. “I look forward to working alongside Daniel Lee and the talented teams to drive global growth, delight our customers, and write the next chapter of the Burberry story,” Schulman said.
Kate Ferry’s Announcement and Strategic Changes
Additionally, chief financial officer Kate Ferry announced that “a few hundred” employees would be laid off worldwide as part of a cost reevaluation. Murphy stated that these imminent changes will “improve our second half, strengthen our competitive position, and underpin long-term growth.”
Stay Tuned for More Updates
Stay tuned for more updates on Burberry’s strategic moves and upcoming campaigns.
