Burberry boss ousted as sales continue to fall – BBC News

Burberry is suspending dividend payments to shareholders for the current financial year as it looks to save cash.

Mr Murphy said the actions being taken, including cutting costs, would improve the company’s performance in the second half of the year.

Earlier this month, reports said hundreds of jobs at the company could be cut.

On Monday, Burberry’s chief financial officer, Kate Ferry, said she could not comment on job losses as a consultation process was under way, but added that a few hundred roles could be at risk, mostly in its UK corporate division.

Burberry’s sales have been struggling amid weaker demand for luxury goods, with trading in China and the Americas seeing some of the biggest falls.

In its latest update, Burberry said sales in the Asia Pacific region were down 23% from a year earlier with sales in mainland China falling 21%. Sales in the Americas also dropped by 23%.

In May this year, the company had announced a 40% fall in full-year profits.

Burberry is not the only luxury brand to suffer from the downturn. In March, luxury goods company Kering issued a profit warning after it said demand for its Gucci brand had slumped in China.

Pauline Brown, former boss of the luxury group LVMH for North America, said a change in consumer attitudes in China was affecting sales of mid-range brands particularly.

“We see that happening in every market that transitions from an emerging market to a more mature one. Tastes evolve and people’s interest in displaying their wealth changes along with that,” she told the BBC World Service.

“Quieter” brands like Hermes and the firms targeting the ultra-rich like Chanel or Montclair, were likely to weather the downturn better than highly visible brands like Gucci and “aspirational” ones like Coach or Burberry, she said.

Mr Murphy said he was “pleased” with Mr Schulman’s appointment.

“Josh is a proven leader with an outstanding record of building global luxury brands and driving profitable growth,” he added.

Mr Schulman said he was “deeply honoured” to lead Burberry.

“Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation,” he said.

Shares in Burberry have more than halved over the past year, and they fell a further 17% on Monday.

“It’s super tough for luxury brands reliant on aspirational shoppers,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.

“They aren’t as insulated as the super-rich from the pressures whipped up in an era of high interest rates and an uncertain economic climate.

“Chopping and changing collections to attract the eye of hard-to-please fashion editors can confuse customers and there is set to be a return to the brand’s core principles and the traditional focus on dressing the elite,” Ms Streeter added.