Embattled luxury retailer Burberry has ousted its chief executive Jonathan Akeroyd after warning on profits.
The luxury brand has announced that Joshua Schulman has been appointed chief executive officer and executive director, after Akeroyd agreed to step down and leave the business with immediate effect by mutual agreement with the board.
It comes after Burberry reported a “disappointing” first-quarter trading update, with retail revenue slipping 22% to £458m and comparable store sales falling 23% in Asia, 16% in Europe and the Middle East, and 23% in the Americas.
The luxury retailer said that if the slowdown continued for the remainder of this quarter, “we would expect to report a H1 FY25 operating loss and FY25 operating profit to be below current consensus”.
The retailer said it has shifted focus to “reconnect with our core customer base and capitalise on the enduring appeal of Burberry’s iconic products” by rebalancing its product offer to focus more on “everyday luxury”; refocusing its marketing to focus on outerwear and “house icons”; improving customer conversion online; and driving operational efficiencies and cost savings.
Despite these measures, Burberry said it still expected that wholesale revenues would decline by around 25% in the first half and by around 30% for the full financial year.
It said capital expenditure would be around £150m, with a £55m currency headwind to revenues and £20m to operating profits for FY25 based on foreign exchange rates.
Burberry chair Gerry Murphy said: “Our Q1 FY25 performance is disappointing. We moved quickly with our creative transition in a luxury market that is proving more challenging than expected. The weakness we highlighted coming into FY25 has deepened and if the current trend persists through our Q2, we expect to report an operating loss for our first half. In light of current trading, we have decided to suspend dividend payments in respect of FY25.
“We are taking decisive action to rebalance our offer to be more familiar to Burberry’s core customers whilst delivering relevant newness. We expect the actions we are taking, including cost savings, to start to deliver an improvement in our second half and to strengthen our competitive position and underpin long-term growth.”
New CEO
Burberry said that new boss Schulman will join on July 17 and bring “a track record of driving transformative growth and value creation as CEO of global luxury, fashion, and retail businesses”.
Schulman was chief executive of Michael Kors between 2021 and 2022, and brand president of Coach from 2017 to 2020.
Previously he worked for the Neiman Marcus Group where he was president of Bergdorf Goodman for five years and was chief executive of Jimmy Choo in London. He has also worked in director roles at Yves Saint Laurent and Gucci.
Schulman said: “I am deeply honoured to join Burberry as chief executive officer. Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation. Its original purpose to protect people from the weather is more relevant than ever. I look forward to working alongside [chief creative officer] Daniel Lee and the talented teams to drive global growth, delight our customers, and write the next chapter of the Burberry story.”
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