Burberry Forecasts an Operating Loss in H1 Amid Executive Shakeup

In its first quarter trading call on Monday, Burberry warned investors that it expects to see an operating loss in the first half of the next fiscal year, according to WWD.

In the previous quarter, the British fashion house saw retail revenue decline 22% to £458 million GBP, and its sales were also down by 20%. Comparative retail revenue was down by 21%, a substantial fall from the 18% increase the brand experienced in the same period last year.

Per the outlet, the brand’s chairman Gerry Murphy called the results “disappointing,” adding that Burberry will see an operating loss in the forthcoming three months should the luxury slowdown continue. Murphy did not share exact figures for the forecasted loss.

Burberry’s shares fell 16% to £7.40 GBP on Monday, after Murphy suspended dividend payments. While the brand’s increased prices under Daniel Lee’s reign have outcasted some clientele, Murphy stated that the brand is now focused on taking “decisive action” to become “more familiar to Burberry’s cor customers while delivering relevant newness.” The brand will launch a new campaign this October, with these tenants in mind.

Additionally, the brand has shaken up its executive leadership in response to its falling sales. Joshua Schulman, the former managing director at Coach, will immediately replace Jonathan Akeroyd as the brand’s CEO. “I look forward to working alongside Daniel Lee and the talented teams to drive global growth, delight our customers, and write the next chapter of the Burberry story,” Schulman said of his appointment.

Simultaneously, Burberry’s chief financial officer, Kate Ferry, disclosed that “a few hundred” employees would be promptly laid off worldwide as the brand reevaluates its costs.

Murphy stated that the brand’s imminent shakeups will “start to deliver an improvement in our second half, and to strengthen our competitive position and underpin long-term growth.”