LONDON— Times are getting tougher, but Burberry is rising to the challenge with a new cost-savings plan that could see 20 percent of its workforce eliminated by 2027, and a determination to build sales back to 3 billion pounds, with designer Daniel Lee fully committed.
Chief executive officer Josh Schulman, who arrived last summer, has been acting swiftly to stabilize the business, where revenue fell 17 percent to 2.46 billion pounds in fiscal 2025.
In the 12 months to March 29, comparable retail sales slid 12 percent, but the trend has been improving. In the second half, those same-store sales fell just 5 percent, compared with 20 percent in the first half.
The decline in revenue led to an operating loss of 3 million pounds compared with a profit of 418 million pounds in the previous year.
Adjusted operating profit was 26 million pounds, compared with 418 million pounds in the previous year. Once again the trend was an upward one, with Burberry notching a profit of 67 million pounds in the second half, which offset a loss of 41 million pounds in the first six months.
Inventory fell faster than expected during the year, outstripping analysts’ projections. Schulman said the company can now move forward to a new era of product “scarcity” — and desirability.
An image from the new Burberry Highgrove campaign.
Schulman knew he was on the right track with the scarcity strategy a few weeks ago when he tried to buy a B Clip bag — one of Burberry’s current bestsellers — for Mother’s Day. There wasn’t one to be found in North America, and he ended up sending one from Europe to his mother in Los Angeles.
Schulman has been going farther — and faster — with his “Burberry Forward” plan that’s aimed at rebuilding sales, margins and cashflow. He’s putting the focus on “art and science,” tightening operations and laying off staff.
This week, in conjunction with the 2025 results, Burberry unveiled an enriched cost-savings plan aimed at unlocking a total of 100 million pounds by fiscal 2027.
Last year, the company had already revealed a plan to save 40 million pounds in the same time span. It has targeted a further 60 million pounds in cost savings, with plans to eliminate some 1,700 global roles and use its funds to invest in future growth opportunities.
“Today has been a tough day,” Schulman said in an interview from his office in Burberry’s newly refurbished Horseferry House headquarters in Westminster.
“There are lots of mixed emotions because, on the one hand, we’re seeing the progress of Burberry Forward, and my optimism has moved to confidence that it is the right path for us. On the other hand, we’re entering into a process where we may say goodbye to many colleagues who have contributed to the Burberry Forward turnaround,” he added.
Joshua Schulman, CEO of Burberry.
The markets applauded the strategy, sending Burberry shares soaring nearly 16 percent to close at 9.57 pounds on Wednesday.
Burberry plans to cut mainly office-based jobs, and also wants to reorganize the schedules of its shop floor staff so they are working during “peak traffic hours,” Schulman said.
One staff member who’s staying put is Lee, Burberry’s chief creative officer, who over the past year has been keeping the industry guessing about his future moves.
“Daniel and I are committed together to moving Burberry forward,” Schulman told WWD. He added that the designer, who joined Burberry in 2022, has been delivering “an extraordinary expression of timeless British luxury.”
In another cost-cutting measure, Burberry will also eliminate the night shift at its factory in Castleford, Yorkshire, where the gabardine trenchcoats are made. Around 25 percent of staff will be impacted.
Burberry said the downsizing is due to overproduction. Like many other British businesses, Burberry has been hit hard by the Labour government’s raft of new taxes on employers, resulting in job cuts across a variety of industries.
Daniel Lee is staying put as chief creative officer of Burberry.
Schulman said he’s proud of Burberry’s manufacturing heritage in the U.K. and is cutting staff to “safeguard the long-term viability” of local operations.
The company is planning a “multimillion-pound” investment in Castleford in the second half of the year. Schulman said he wants to see that factory, and Burberry’s other Yorkshire site that makes the gabardine fabric, thrive “for many generations to come.”
He’s running a tight ship. Shortly after arriving at Burberry last year, Schulman chose not to replace the company’s chief commercial officer. Instead, he’s doing the job himself, with the major regional heads reporting directly to him.
The most recent person in the role was Gianluca Flore, who left shortly before Schulman joined the company.
Schulman thought the role would only be temporary, but “as I got to know the organization, I thought there was an opportunity for all of us to get closer to the customer. So I decided a few months ago that I would not replace the chief commercial officer and, in essence, that takes the CEO one step closer to the customer,” he said.
He’s also putting a big focus on teamwork.
Schulman said that he, Lee, Burberry’s chief marketing officer Jonathan Kiman and Paul Price, chief product merchandising and planning officer, all worked together on Burberry’s fall 2025 show from “end to end.”
Burberry’s star-studded campaigns, which tap into British culture, film and humor, are also the result of that collective effort, he said.
Jerry Hall and her daughter, Georgia May Jagger, in Burberry’s Mother’s Day campaign.
Schulman and his team have also been laser-focused on the product, and promoting it to a wide variety of customers.
At Horseferry House, there are Burberry-clad mannequins everywhere.
Instead of digital screens beaming out shows, the lobby is filled with them dressed in Lee’s latest designs. Schulman even challenged the equities analysts to check out the mannequins in the room where he was presenting the 2025 results.
“Later, we can have a game. See if you can tell me which are the runway looks and which are the commercial ones,” said Schulman, adding that both should be indistinguishable and “live holistically together.”
In that same room there was also a scarf bar on display. Schulman said the rollout had begun and there should be nearly 200 scarf bars worldwide by the end of this year. The company will be offering a scarf personalization service in a bid to drive sales volumes on the shop floor.
Asked about the new U.S. tariff regime, Schulman argued that Burberry was “less exposed” than some of its peers as the region represents 19 percent of sales. Tariffs on U.K. goods landing in the U.S. are currently at 10 percent.
Schulman described the tariff situation as “dynamic and changing. We’re as prepared as we can be.” He said Burberry had already been working on its price architecture, and has already made some “surgical” midsingle-digit price increases. Going forward, he said Burberry planned to “protect” its opening price points in the face of tariffs.
A look inside the refurbished Burberry flagship on New Bond Street.
He noted that Burberry was much more exposed in Asia-Pacific, which represents around one-third of revenue.
Asia-Pacific was the worst performer in fiscal 2025, with comparable store sales falling 16 percent. Mainland China was down 15 percent, while sales in South Korea fell 18 percent.
The Americas registered a 9 percent drop while the EMEIA region, Europe, the Middle East, India and Africa, saw sales decline 8 percent.
Burberry has had a “choppy” start to the new year, which began on March 30, shortly before U.S. President Donald Trump unveiled his draconian tariff regime, which he later amended.
Analysts were broadly upbeat about Schulman’s creative and business moves so far.
RBC Capital Markets said Burberry’s fourth-quarter performance was better than expected, and gave a thumbs up to the deeper cost-saving program.
“We view these results as an encouraging first step, and believe management are pursuing the right strategy to reset the business on a more level footing, which in time should support a return to positive revenue and profit growth,” the bank said.
Deutsche Bank said Burberry “is showing further progress on its brand turnaround” with the fourth quarter “sequentially better than Burberry’s luxury peers. We like the Burberry story and see the sequential improvement in sales as the key factor for investors over the next 12 months.”
British tennis player Jack Draper for Burberry.
Citi maintained its buy rating on the stock, and said Burberry “has fared better than its peers through this reporting season. We appreciate cost agility in a more uncertain macroeconomic environment and the announcement” of the updated cost-savings program, of which 24 million pounds has already been delivered.
The bank called Burberry Forward a “sensible” plan and believes it will “reignite brand visibility and desirability. Burberry’s strategic plan is robust, we think. While patience is needed, potential rewards now outweigh the risks,” Citi said.
