Management change at Burbury as sales slump

Burberry, the renowned British luxury fashion house, has appointed Joshua Schulman as its new Chief Executive Officer, replacing Jonathan Akeroyd in a bid to revitalize the brand amidst declining sales. This leadership change comes as Burberry faces significant challenges in the luxury market, particularly in China.

Schulman, a veteran in the luxury fashion industry, brings extensive experience from his previous roles at Michael Kors, Coach, and Jimmy Choo. His appointment marks Burberry's fourth CEO in a decade, highlighting the company's ongoing efforts to adapt to the evolving luxury market.

The leadership transition coincides with Burberry's announcement of a sharp 21% decline in first-quarter revenue across all geographic regions. This downturn reflects a broader slowdown in the luxury sector, with sales in the Asia Pacific region, including mainland China, dropping by 23%.

In response to these challenges, Burberry is considering cost-cutting measures, including potential job cuts, primarily in its UK corporate division. The company has also suspended dividend payments to shareholders for the current financial year to conserve cash.

Burberry's Chairman, Gerry Murphy, expressed disappointment in the company's recent performance but welcomed Schulman's appointment, citing his proven track record in building global luxury brands and driving profitable growth. Schulman, in turn, expressed his honor in leading Burberry, describing it as "an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation".

As Schulman takes the helm, Burberry aims to refocus its strategy on its core customers while still delivering relevant innovations. This shift comes after Akeroyd's attempt to move the brand further upmarket, which some analysts believe may have alienated Burberry's traditional customer base.

The luxury fashion industry as a whole is facing challenges, with changing consumer attitudes in key markets like China affecting sales of mid-range brands. Burberry's stock price has reflected these difficulties, falling by more than half over the past year and dropping an additional 17% following the announcement of the leadership change and disappointing sales figures.