Burberry has warned it might shed 1,700 jobs, about 18 per cent of its international workforce, by 2027 because the UK luxurious model introduced new value cuts in an effort to show across the enterprise.
The company, which appointed former Coach and Jimmy Choo chief executive Joshua Schulman last July to revive its fortunes, disclosed the plan as a part of a push to generate a further £60 million (US$80.06 million; S$103.88 million) of financial savings by 2027.
It got here as Burberry stated it had swung to an working lack of £3 million within the 12 months to March 29, in contrast with a £418 million revenue the 12 months earlier than. Income fell 17 per cent to £2.5 billion.
The newest cost-cutting drive would take the deliberate annual financial savings to £100 million a 12 months. The corporate stated the “organisational modifications” have been meant to make sure Burberry was “match for the long run”. Burberry’s shares rose 6.9 per cent on the information, trimming the decline over the previous 12 months to 26 per cent.
The vast majority of the proposed cuts might be made in Burberry’s workplaces globally, though there may also be redundancies in shops and at its Castleford manufacturing unit within the UK, the place it plans to take away the night time shift.
“For a very long time we’ve had overcapacity at that [UK] facility and that’s merely not sustainable at this level,” Schulman stated. Nevertheless, he added that the modifications have been designed to “safeguard our UK manufacturing” and it might make investments “considerably” within the manufacturing unit within the coming months.
“Our intention is that we make our British heritage raincoats within the UK for a lot of generations to come back,” he stated.
Schulman changed Jonathan Akeroyd as chief govt after his try to maneuver the model upmarket and compete with high-end teams corresponding to Hermes alienated consumers. The model has additionally needed to deal with a broader slowdown within the international luxurious market, significantly in China, the corporate’s principal progress engine.
Burberry’s new chief govt stated on Wednesday (Might 14) that the model was “nonetheless within the early levels” of its turnaround, however that he was optimistic the corporate’s “finest days are forward” and that it might ship “sustainable, worthwhile progress over time”.
Retail gross sales fell by 6 per cent on a like-for-like foundation within the remaining quarter of the corporate’s monetary 12 months, barely higher than analysts had anticipated. Like-for-like gross sales throughout all the group fell by 12 per cent within the 12 months.
Schulman stated “issues acquired just a little bit uneven” within the US within the fourth quarter however insisted Burberry noticed “alternative” within the nation regardless of President Donald Trump’s tariffs. “The American luxurious buyer is essential to us,” he added.
The chief govt has been aiming to refocus the corporate on traditional outerwear merchandise, corresponding to its staple trenchcoats and scarves. He has additionally broadened the vary of value factors, together with decrease ones in sure classes.
Luca Solca, a luxurious analyst at Bernstein, stated he had been “anticipating a few quarters of ache, and right here is one other one out of the way in which” however added that “the brand new imaginative and prescient and technique for the model is sensible”.
Laura Onita © 2025 The Monetary Occasions.
This text initially appeared in The Financial Times.
