Burberry has ousted its chief executive as the luxury British brand warned on profits and said it wanted to “reconnect” with its core customers.
In an unscheduled trading update on Monday, Burberry said Jonathan Akeroyd was leaving the company “with immediate effect” and “by mutual agreement with the board”. It comes less than three years after the former Versace boss was appointed in 2021.
Burberry has parachuted in the former Coach chief executive and Farrow & Ball director Joshua Schulman to the top role to replace Akeroyd, and revealed a list of “immediate actions” needed to reverse the company’s fortunes after issuing its second profit warning this year.
It follows a double-digit decline in sales across its core markets in what the company described as a “disappointing” first quarter. Store sales in the Americas and Asia Pacific tumbled 23%, while sales in Europe, the Middle East, India and Africa dropped 16%.
Burberry’s London-listed shares plunged 15% after the gloomy statement on Monday morning – in which the company also announced it was suspending shareholder dividend payouts – making it the top faller on the FTSE 100.
Under Schulman’s leadership, the fashion brand said it would focus on “more of the timeless, classic attributes that Burberry is known for”.
That will include an outerwear campaign to be launched globally in October, “building on the established resilience of our house icons”.
“We believe there is an opportunity to reconnect with our core customer base and capitalise on the enduring appeal of Burberry’s iconic products and brand while delivering relevant newness,” the company added.
Burberry has been suffering amid a slowdown in demand for luxury goods, which also hit the sales of rivals including Kering and Mulberry earlier this year. However, Burberry’s failure to revive sales has clearly caused concern among board members, including the chair, Gerry Murphy, who said the first-quarter results were “disappointing”.
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“We moved quickly with our creative transition in a luxury market that is proving more challenging than expected,” Murphy said. “If the current trend persists through our Q2, we expect to report an operating loss for our first half.”
He added: “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.”
Those actions include cutting unspecified costs across the business, and working to improve online sales with a website revamp next month.