New CEO Joshua Schulman Shares Next Steps Amid a Significant Decline in First-Half Earnings
In a move to refocus and recover the struggling company, freshly-appointed CEO Joshua Schulman has revealed a new strategy called “Burberry Forward”. The luxury British brand reported a first-half operating loss of 53 million pounds, along with a 22% drop in revenue to 1.09 billion pounds.
By spearheading the “Burberry Forward” initiative, Schulman is working on a swift reversal, following his joining Burberry in July after Jonathan Akeroyd’s departure. Schulman said the brand is “acting with urgency to course correct, stabilize the business and position Burberry for a return to sustainable, profitable growth.” Schulman remains optimistic, stating Burberry’s “best days are ahead.”
As part of his plan, Schulman announced a 40 million pounds cost-saving initiative and insisted that his strategy will enable Burberry to attain an annual turnover of 3 billion pounds in the future. However, this projection falls short of Akeroyd’s pre-pandemic medium-term estimate of 4 billion pounds in revenue.
Despite current hardships, Schulman remains confident. “Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation. Today, we are acting with urgency to course correct, stabilize the business and position Burberry for a return to sustainable, profitable growth,” said Schulman.
The first half of the year saw a 20% decline in comparable store sales, leading to an adjusted operating loss of 41 million. This contrasts starkly to a profit of 223 million pounds reported for the same period last year. And in the first quarter, Burberry reported a 22% decline in retail revenue to reach 458 million pounds.
While Burberry maneuvers through this crisis, the brand has made efforts to capture a wider audience. Recent campaigns featured both celebrities and international Burberry enthusiasts. This week, the brand unveiled a new virtual scarf try-on experience in a bid to boost customer engagement.
Alongside brand-level changes, Schulman is making modifications on the managerial front. Paul Price, a former top manager at Burberry, has been appointed as the Chief Product Merchandising and Planning Officer. He will take his position on 9th December and will report directly to Schulman.
Although the future of Burberry’s Chief Creative Officer, Daniel Lee, remains unclear, he expressed optimism about the Schulman era. He referred to Schulman’s arrival as adding a “sense of American optimism” to the brand and showed a willingness to remain with Burberry, looking forward to exploring how the brand can balance the aspirational elements of its collection with commercial appeal.