Burberry unveils 'urgent' strategic plan as sales plummet

Burberry has unveiled a new strategic plan ‘Burberry Forward’, to reignite brand desire and "correct years of underperformance", with the latest figures revealing a 22% drop in revenue for the first half of fiscal year 2025.

According to Burberry’s latest Interim results for 26 weeks ended 28 September 2024, the brand’s total revenue has dropped 22% to £1,086m. Meanwhile, its retail comparable store sales have plummeted 20% YOY globally. The company also recorded an adjusted operating loss of £41 million (US$52 million) during the period.

Burberry's new CEO Joshua Schulman, who joined from Michael Kors in July, admitted the recent underperformance has stemmed from several factors, including inconsistent brand execution and a lack of focus on its core outerwear category and core customer segments. “Today, we are acting with urgency to course correct, stabilise the business and position Burberry for a return to sustainable, profitable growth,” Schulman added. 

He said that over the past several years, the brands moved too far from its core with disappointing results. “Our brand expression was focused on being modern at the expense of celebrating our heritage. We introduced new brand codes and signifiers that were unfamiliar to our customers. Our product was weighted to seasonal fashion with a niche aesthetic obscuring our more timeless core collections.” 

He added that the brand’s pricing particularly in leather goods did not always align with its category authority. This resulted in a narrow base of luxury customers.

With the new strategic plan, he said Burberry aims to focus on reconnecting the brand with its original purpose and leveraging its strengths with a disciplined approach and range of products to attract a broad base of luxury customers. 

Moving forward, the brand will focus on juxtapose heritage and innovation across all customer touchpoints; balancing seasonal fashion messages with campaigns celebrating outerwear authority; capturing British wit and style and balancing recognisable London imagery with British countryside.  

In terms of authority, the brand will align pricing with category authority; celebrate iconic brand codes with recognisable brand signifiers and rebalance offer with fewer, bigger investments. 

Moreover, it will increase store productivity through core category amplification and leverage data-driven decision making to complement creativity and intuition. 

Delivery of the plan will be facilitated by greater alignment between commercial and creative teams and Burberry has pledged to put the customer at the heart of everything it does.   

“We are reviving a high-performing culture. Our plan will be underpinned by continued focus on productivity, simplification and financial discipline[...]We are confident we can get back to generating £3 billion (US$3.8bn) in annual revenue over time, while rebuilding margins and driving strong cash generation,” Schulman explained.  

According to Burberry’s latest Interim results for 26 weeks ended 28 September 2024, the brand’s total revenue has dropped 22% to £1,086m. Meanwhile, its retail comparable store sales have plummeted 20% YOY globally. 

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