‘Urgent’ course correction at Burberry to address underperformance

West Yorkshire-based fashion brand, Burberry, says it is taking urgent action to improve its performance and stabilise the business.

It has initiated a cost savings programme to unlock annualised savings of about £40m, of which around £25m is to be delivered in FY25.

A spokesman for Burberry said: “We are confident we can get back to generating £3bn in annual revenue over time, while rebuilding margins and driving strong cash generation.”

The company has also today issued its interim results for the 26 weeks ended 28 September 2024, which feature a 20% drop in revenue to £1.1bn (2023: £1.4bn) and a pre-tax loss of £80m (2023: £219m pre-tax profit).

Burberry reported an adjusted operating loss of £41m in the first half, and warned it was too early to predict – with the festive period ahead – whether it would make a profit for the full year.

Joshua Schulman, chief executive officer, said: “Our recent underperformance has stemmed from several factors, including inconsistent brand execution and a lack of focus on our core outerwear category and our 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.

“We have a powerful brand with broad appeal among luxury customers, authority in the outerwear and scarf categories which have remained resilient through this period, and a strong presence in all key luxury markets.

“Now, we have a clear framework to reignite brand desire, improve our performance and drive long-term value creation. Building on our strong foundations, I am confident Burberry’s best days are ahead.”

The company’s turnaround plan includes rebalancing its offer with fewer, bigger investments.

Burberry says it will emphasise continued focus on “productivity, simplification and financial discipline.”