Latest news with #luxurybrand
CNA
15-05-2025
- Business
- CNA
Burberry to cut workforce by almost a fifth in cost-cutting drive
Burberry has warned it could shed 1,700 jobs, about 18 per cent of its global workforce, by 2027 as the UK luxury brand announced new cost cuts in an effort to turn around the business. The company, which appointed former Coach and Jimmy Choo chief executive Joshua Schulman last July to revive its fortunes, disclosed the plan as part of a push to generate an additional £60 million (US$80.06 million; S$103.88 million) of savings by 2027. It came as Burberry said it had swung to an operating loss of £3 million in the 12 months to March 29, compared with a £418 million profit the year before. Revenue fell 17 per cent to £2.5 billion. The latest cost-cutting drive would take the planned annual savings to £100 million a year. The company said the 'organisational changes' were meant to ensure Burberry was 'fit for the future'. Burberry's shares rose 6.9 per cent on the news, trimming the decline over the past year to 26 per cent. The majority of the proposed cuts will be made in Burberry's offices globally, although there will also be redundancies in stores and at its Castleford factory in the UK, where it plans to remove the night shift. 'For a long time we've had overcapacity at that [UK] facility and that's simply not sustainable at this point,' Schulman said. However, he added that the changes were designed to 'safeguard our UK manufacturing' and it would invest 'significantly' in the factory in the coming months. 'Our intention is that we make our British heritage raincoats in the UK for many generations to come,' he said. Schulman replaced Jonathan Akeroyd as chief executive after his attempt to move the brand upmarket and compete with high-end groups such as Hermes alienated shoppers. The brand has also had to contend with a broader slowdown in the global luxury market, particularly in China, the company's main growth engine. Burberry's new chief executive said on Wednesday (May 14) that the brand was 'still in the early stages' of its turnaround, but that he was optimistic the company's 'best days are ahead' and that it would deliver 'sustainable, profitable growth over time'. Retail sales fell by 6 per cent on a like-for-like basis in the final quarter of the company's financial year, slightly better than analysts had expected. Like-for-like sales across the entire group fell by 12 per cent in the year. Schulman said 'things got a little bit choppy' in the US in the fourth quarter but insisted Burberry saw 'opportunity' in the country despite President Donald Trump's tariffs. 'The American luxury customer is very important to us,' he added. The chief executive has been aiming to refocus the company on classic outerwear products, such as its staple trenchcoats and scarves. He has also broadened the range of price points, including lower ones in certain categories. Luca Solca, a luxury analyst at Bernstein, said he had been 'expecting a couple of quarters of pain, and here is another one out of the way' but added that 'the new vision and strategy for the brand makes sense'.
Daily Mail
14-05-2025
- Business
- Daily Mail
Troubled Burberry slashes 1,700 jobs but boss insists British fashion giant's best days are ahead
The boss of Burberry yesterday insisted the company's 'best days are ahead' as he outlined plans to slash 1,700 jobs – including 750 in the UK. Joshua Schulman said he was 'more optimistic than ever' about the outlook despite cuts that will see it axe a quarter of its 3,000-strong UK workforce. The luxury brand plans to save an extra £60million through the redundancies, including at its London head office and Castleford factory in Yorkshire where its trenchcoats are made. Schulman said it had been hit by the UK's punitive tourist tax and Donald Trump's tariffs. Changes under consultation include scrapping night shifts at Castleford and reducing the number of staff in shops. It came as Burberry posted a £66million loss for the 12 months to March 29 after sales fell 12 per cent to £2.5billion amid a slump in China. But this was not as bad as the City feared and Royal Bank of Canada analysts said the results were an 'encouraging first step' in a turnaround strategy. Schulman, who took over last July, said: 'While we are operating against a difficult macroeconomic backdrop and are in the early stages of our turnaround, I am more optimistic than ever that Burberry's best days are ahead and we will deliver sustainable profitable growth.' Shares jumped 17 per cent, or 140.8p, to 967.6p – up from 694p on April 3, but down from 2399.5p in April 2023. The shares took a hammering after US President Trump announced tariffs last month. Their recovery accelerated this week after the US and China agreed to cut duties in a 90-day truce. Schulman said sales in the US have been 'choppy' but that he was 'very confident' about American demand. Burberry has been pinning its recovery hopes on more wealthy Americans splashing out on expensive clothes and accessories as demand from China falls. Schulman pledged to return to 'timeless British luxury' by focusing on outerwear, including its £1,900 signature coats and £420 scarves. He hailed the 'It's always Burberry weather' campaign – featuring Cara Delevingne and Rosie Huntington-Whiteley – for improving brand perceptions. And he hit out at the tourist tax in the UK, which the Mail has called on the Government to scrap. 'We're operating in a challenging environment and clearly this has been exacerbated by decisions like the withdrawal of UK tax-free shopping,' he said. The shares crashed to a 14-year low last September but Royal Bank of Canada said: 'We believe management are pursuing the right strategy to reset the business on a more level footing.' Why shares are a buy By Anne Ashworth I'm with Joshua Schulman –shares in Burberry have further to run. As the ex-boss of Coach, the American handbag business, Schulman knows how to cater to the tastes of the US moneyed classes. The glossy look of model Rosie Huntington-Whiteley, who features in the Burberry campaign, is the vibe they like. In March, I wrote that I was sticking with the shares. The price was 1036p; they sank to 674p in the tariff market rout but rose yesterday to 967.6p. Expect more bid rumours. But a predator is more likely to emerge when Burberry's comeback is close to complete. And wouldn't we
The Guardian
14-05-2025
- Business
- The Guardian
Burberry may cut 1,700 jobs globally to reduce costs as profits fall
Burberry has said it could cut 1,700 jobs worldwide by 2027 – including removing the entire night shift at its Yorkshire raincoat factory – as the struggling fashion house ramps up its efforts to slash costs after a tumble in profit. The British luxury brand announced the job cuts on Wednesday after reporting a 117% fall in its annual pre-tax profits in the last financial year. It recorded a £66m loss, down from a profit of £383m, as the company has struggled against a broader malaise in the global luxury goods industry. The company has said a new plan to find £60m in cost savings could affect 1,700 jobs around its global offices. Burberry employed about 9,300 people across the world last year, so the cuts could affect almost a fifth of its staff. Joshua Schulman, the chief executive of Burberry, said most of the cuts would be at the group's head offices around the world – led by London – but jobs would also go by reorganising staff rotas in stores and dropping one shift at its factory in Castleford. He said the change in Castleford, which is expected to affect about 150 jobs, came ahead of a 'significant investment' in the second half of this year in the factory. 'For a long time we have had overcapacity at that facility and that's simply not sustainable at this point,' he said. 'We are making this change to safeguard our UK manufacturing and will be making a significant investment in renovating the factory [later this financial year].' The fashion house, which is best known for its signature trench coats, has struggled in recent years because of a weak luxury market and a difficult brand revamp project. The company hired Schulman, the former boss of the US fashion brand Coach, as chief executive last year in an attempt to revive its fortunes. The new plan to cut costs is on top of a £40m savings programme that Schulman announced in November. Burberry shares bounced by as much as 8.6% on Wednesday morning. Schulman said he was 'more optimistic than ever that Burberry's best days are ahead', although he admitted the first half of the last financial year had been challenging. Overall revenue in its financial year ending on 29 March dropped by 15%, stripping out the impact of foreign exchange rates. Charlie Huggins of the investment broker Wealth Club said the 2025 period had been an 'annus horribilis' for Burberry. 'Luxury consumers across the globe significantly tightened their belts hitting the whole luxury sector. But Burberry has seen more impact than most,' he said. 'Its operational execution has left a lot to be desired in recent years and the brand has lost its lustre, compounding the wider sector's issues.' Sign up to Business Today Get set for the working day – we'll point you to all the business news and analysis you need every morning after newsletter promotion Huggins noted, however, that there had been some 'tentative signs' of encouragement, with a 6% like-for-like drop in sales in the final quarter of the year, which was not as bad as the 7% drop that City analysts had forecast. A wider downturn in the luxury goods sector has also hit the sales of bigger rivals such as Kering, which owns brands such as Gucci and Balenciaga, and LVMH, which owns Louis Vuitton and Christian Dior. Burberry has lost roughly a quarter of its market value over the past year, while LVMH has lost about a third, and Kering is down by more than two-fifths.
Telegraph
14-05-2025
- Business
- Telegraph
Burberry to cut 1,700 jobs
Burberry is to cut 1,700 jobs over the next two years as it battles to reduce costs after tumbling to a £66m loss. The British fashion house said it aimed to save an extra £100m by the end of the 2027 financial year, partly through cutting around 18pc of its global workforce. It came as the company revealed it had swung to a £66m loss in the year to April compared with profit before tax of £383m a year earlier. Revenues tumbled 17pc to £2.4bn, while like-for-like sales fell by 12pc. Joshua Schulman, Burberry's chief executive, who unveiled a turnaround plan for the business in November, admitted it had struggled after a 'challenging first half' of its financial year. The luxury fashion brand, which was founded in 1856, said it would take an £80m hit over the next two years as it follows through with the jobs cuts, as well as efforts to cut expenses in procurement and real estate. The company also warned the 'current macroeconomic environment has become more uncertain' after Donald Trump upended global trading relationships with his tariff campaign. Mr Schulman took over as chief executive last July after years of failed attempts to improve sales under his predecessor, Jonathan Akeroyd. Between early 2023 and Mr Schulman taking over, Burberry's shares dived by more than 70pc. They have fallen 15pc so far this year. The company has struggled with a downturn in China, with lower sales in Asia the biggest drag on its performance last year. Mr Schulman's turnaround plan, which has been dubbed Burberry Forward, aims to focus the brand on the 'spirit of Britain'. The chief executive pointed to the 'continued resilience of our outerwear and scarf categories' as he tries to boost the popularity of the brand's classic trench coats, which cost about £2,000. However, analysts at Jefferies said the latest figures showed Burberry's turnaround plan was in 'slow-burn mode'. Mr Schulman said: 'While we are operating against a difficult macroeconomic backdrop and are still in the early stages of our turnaround, I am more optimistic than ever that Burberry's best days are ahead and that we will deliver sustainable profitable growth over time.'
