Burberry soars on the stock market after the (negative) accounts of the first six months of the year and the announcement of a “urgent” strategic plan to relaunch the brand. “Today we are taking urgent action to correct the situation, stabilise the business and position Burberry for a return to sustainable growth,” said the group’s chief executive Joshua Schulman, quoted in a note. Despite the difficulties, Burberry shares in London gained more than 15% of their value, to 843 pounds. The basis of the rise, according to analysts, would be the thought that the company's weak accounts strengthen the hypothesis that Moncler could attempt to acquire the British company.
Burberry's Half-Yearly Report
In the first half of 2024 Burberry recorded a net loss of 74 million of pounds. Turnover fell by 22% at 1,086 billion pounds, while retail sales comparables fell by 20%.
La adjusted operating loss for the first six months of the year amounts to £41m, compared with a profit of £223m the previous year.
Burberry announces relaunch plan
Burberry's new CEO Joshua Schulman has announced a relaunch strategy for the brand. The manager said the fashion house must return to focusing on outdoor clothing and its core customers. Meanwhile, he has Dividend suspended for 2025 and announced a cost reduction program for £40 million ($51 million).
Burberry said it was too early to say, with the key winter holiday season upon us, whether it could turn a profit for the current financial year.
In its strategy update, Burberry reported that the price increases, especially for leather goods, have been excessive and prices “have not always aligned with our industry authority.” Burberry’s creative director, Daniel Lee, who joined the brand two years ago, made a name for himself at Bottega Veneta with a line of highly popular shoes and bags. However, his designs for Burberry, a house not primarily known for leather goods, have not been as successful.
