Burberry has announced plans to reduce its global workforce by 1,700 as part of a strategic cost-cutting initiative aimed at revitalising the business. The luxury British brand is in the early stages of a turnaround plan under the leadership of CEO Joshua Schulman, who took over last year. The decision comes despite Burberry reporting an adjusted operating profit of £26 million (US$34.55 million) for the financial year ending March 29, 2025, significantly surpassing analysts’ expectations of £11 million.
Schulman’s strategy marks a shift towards focusing on the brand’s iconic trench coats and scarves, following a period of challenges marked by product missteps, steep price increases, and a broader downturn in the luxury sector. Under his leadership, Burberry aims to reposition itself more effectively within the competitive luxury market.
In the fourth quarter, comparable sales fell by 6%, slightly better than the forecasted 7% decline. While this is a sign of progress, the company is taking a cautious approach as it rolls out its autumn and winter collections. Schulman stated that the brand would increase the frequency and reach of its campaigns to capitalise on improved brand sentiment.
The geographical breakdown of sales reflects the ongoing challenges facing the brand. Sales in both the Americas and the Europe, Middle East, India, and Africa (EMEIA) region fell by 4% year-on-year, while sales in the Asia-Pacific region dropped by 9%. Schulman’s strategy to boost sales by targeting American consumers could face hurdles, given the uncertain outlook for US consumer spending.
While Burberry did not specifically address the impact of US tariffs, it acknowledged that geopolitical developments are contributing to an increasingly uncertain economic landscape. The company did not provide detailed forecasts for the 2026 financial year, opting to focus on stabilising the brand through its ongoing strategic adjustments.
-Reuters
