Burberry CEO Steps Down Amid Profit Warning and Sales Decline
British luxury brand Burberry has announced the immediate departure of its CEO, Jonathan Akeroyd, following another challenging quarter with a sales drop of over 20%. Akeroyd, who held the position for two years, will be succeeded by Joshua Schulman, a seasoned executive with previous CEO roles at Coach and Michael Kors.
The decision comes as Burberry faces a global slowdown in luxury goods spending, prompting the company to issue a profit warning and cancel its dividend. This news led to a 17% drop in Burberry’s stock during midday trading on the London Stock Exchange.
In a candid statement, Burberry chairman Gerry Murphy described the quarter as “disappointing” and noted that the luxury market has been more difficult than anticipated.
“We are taking decisive action to rebalance our offer to be more familiar to Burberry’s core customers whilst delivering relevant newness,” Murphy stated. “We expect the actions we are taking, including cost savings, to start to deliver an improvement in our second half and to strengthen our competitive position and underpin long-term growth.”
To address these challenges, Burberry plans to target high-end spenders and introduce a wider range of “everyday luxury” items. The company also aims to launch a new website in August.
According to Neil Saunders, retail analyst and managing director at GlobalData Retail, Burberry has been struggling with a prolonged period of declining sales and profits. He attributed this to both softer demand for luxury goods and the brand’s strategic direction.
“There is a sense that Burberry has been on the back foot and that Jonathan Akeroyd’s revitalization plans have largely failed to stop the rot,” Saunders commented. “A course correction has been needed for some time, and Burberry is hoping a new CEO can deliver this.”
Burberry, renowned for its trench coats and handbags, is looking to revitalize its brand and regain its competitive edge in the luxury market.