Luxury fashion group Burberry has hired Joshua Schulman, formerly head of US brand Michael Kors, as its new CEO in a shake-up aimed at reversing sliding sales. Schulman will replace Jonathan Akeroyd, who has been “released with immediate effect by mutual agreement with the board”, according to the company. The departure of Akeroyd came as Burberry warned its current management strategy is failing and that future profits will probably fall below expectations. The company also revealed it is suspending dividend payments for this financial year.
Burberry’s retail revenues suffered a 21% fall in the quarter to 29 June as the luxury-goods market proved more challenging than expected. Burberry shares rose slightly on the news of the management shakeup, which Chairman Gerry Murphy called “disappointing”.
Schulman is a seasoned luxury-goods leader who previously headed Jimmy Choo in London between 2007 and 2012. “Josh is a proven leader with an outstanding record of building global luxury brands and driving profitable growth,” said Murphy. Schulman described his new appointment as an “extraordinary luxury brand, quintessentially British, equal parts heritage and innovation.”
Burberry is not alone in struggling to maintain sales; in May, the company reported a 40% fall in full-year profits, and luxury goods giant Kering also issued a profit warning in March, due to slumps in demand for Gucci products in China.
During the past year, Burberry has implemented a number of cost-cutting measures, including streamlining operations and reducing staff, but this has failed to turn the tide of diminishing sales and earnings. The company has also struggled to adapt to the growing trend of e-commerce, where luxury brands are beginning to see a shift from in-store purchases to online sales
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