“Josh is a proven leader with an outstanding record of building global luxury brands and driving profitable growth,” Murphy said. “[He] is absolutely convinced that Burberry’s Britishness is its key distinguishing factor.”
The 52-year-old American will join as chief executive on Jul 17 and be based at Burberry’s head office in London.
Luca Solca, an analyst at Bernstein, said that “it was apparent that the attempted upmarket repositioning had failed — as well as the relaunch under Daniel Lee as creative director — as Burberry heavily discounted its products online and elsewhere”.
Burberry said that if the weak trading in the first quarter persisted into the second, the group would report an operating loss for the first half and that annual profits would be below expectations.
As a result of the deterioration in trading, Burberry said it would suspend its full-year dividend to strengthen its balance sheet.
Piral Dadhania, an analyst at RBC Capital Markets, said the latest snapshot of trading was “incrementally worse vs the already lowered guidance [in January]”, which pointed to “soft brand momentum”.
The group said that with the exception of Japan, sales fell across all its markets in the first quarter of the year, with overall same-store sales dropping 21 per cent.
Akeroyd had been targeting sales of £5 billion (US$6.48 billion;S$8.71 billion) in the long term by selling more higher-margin leather goods, shoes and accessories, such as its Rocking Horse handbags.
Murphy said Schulman had been in talks about a board role “and as things evolved, it was clear that he was interested in a bigger role . . . We acted very quickly.”
The company also confirmed it was in consultations with “a few hundred” employees about redundancies, predominantly corporate roles in the UK.
Murphy said the fall in the share price was a response to “weak current trading — we would acknowledge our results are disappointing” but the underlying value of the brand was solid. He dismissed suggestions that Burberry was more vulnerable to a takeover as a result.
Solca said that “against a weak market, it is not surprising to see brands in transition — like Burberry — struggle”.
Amid a broader downturn in the sector, luxury companies have experienced diverging fortunes, with the weakest such as Kering finding it hard to reboot its flagship Gucci brand. In contrast, Hermes, the maker of Birkin bags, reported a 17 per cent increase in quarterly revenues.
Laura Onita and Oliver Ralph in London © 2024 The Financial Times.
This story originally appeared in The Financial Times.
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