Burberry's boss steps down as group faces slump to first half operating loss

He will be replaced as chief executive by former Michael Kors boss Joshua Schulman, who takes on the role from July 17.

Burberry made the unexpected announcement as it warned it will record a first-half operating loss if retail sales continue to fall at the current pace, having plunged by 21 per cent on a same-store basis in its first quarter to June 29.

It said full-year earnings will also be lower than expected, and suspended its dividend.

Chairman Gerry Murphy said it is a “disappointing” performance but insisted the group is taking “decisive action” to turn round flagging sales.

He said: “Our first-quarter performance is disappointing.

“We moved quickly with our creative transition in a luxury market that is proving more challenging than expected.

“The weakness we highlighted coming into 2024-25 has deepened and, if the current trend persists through our second quarter, we expect to report an operating loss for our first half.”

He added: “We are taking decisive action to rebalance our offer to be more familiar to Burberry’s core customers whilst delivering relevant newness.

“We expect the actions we are taking, including cost savings, to start to deliver an improvement in our second half.”

Mr Murphy continued: "I am pleased that Josh will be joining Burberry as our new chief executive officer.

"Josh is a proven leader with an outstanding record of building global luxury brands and driving profitable growth. He has a strong understanding of our brand and shares our ambition to build on Burberry’s unique creative heritage. His extensive experience in luxury and fashion will be key to realising Burberry’s full potential.”

“I would like to take this opportunity to thank Jonathan Akeroyd for the contribution he has made to Burberry. Jonathan has set out a clear strategy for growth that we will build on.”

Mr Schulman commented: "I am deeply honoured to join Burberry as Chief Executive Officer. Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation.

“Its original purpose to protect people from the weather is more relevant than ever.

"I look forward to working alongside Daniel Lee and the talented teams to drive global growth, delight our customers, and write the next chapter of the Burberry story."

Commenting on outlook, Burberry said: “The slowdown in trading we experienced in Q1 FY25 (the first quarter of the year) continued into July.

"If this trend were to continue through the current quarter, we would expect to report a H1 FY25 operating loss and FY25 operating profit to be below current consensus. As we navigate this period, we have decided to suspend dividend payments in respect of FY25 in order to maintain a strong balance sheet and our capacity to invest in Burberry’s long term growth.”

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