Burberry Announces Turnaround Strategy Amid Sales Decline

Burberry is undergoing a significant transformation under new CEO Joshua Schulman, who has introduced a £40 million cost-cutting initiative and a strategy dubbed 'Burberry Forward' amidst a severe financial downturn. The company reported a staggering 22% drop in revenue for the six months ending in September, leading to an operating loss of £53 million, influenced by a sharp decline in sales across key markets, particularly China. In response, Schulman emphasized a renewed focus on the brand's heritage and core products, particularly outerwear, while also addressing previous pricing strategies that alienated customers. Although the brand's share price has plummeted over 50% this year, markets reacted positively to the announcement of Schulman's turnaround plan, with shares rising by 14% shortly after. Analysts note that Burberry must quickly adapt to stabilize its performance amid a broader luxury goods slump, which has been exacerbated by economic challenges and changing consumer preferences. The company's approach aims to rectify inconsistent brand execution and refocus on its identity to attract its core customer base.