Fashion News Piece
‘Burberry Forwards?’ More like Burberry Backwards...
Amid Republican victory in the US Election and declining sales of luxury goods in China, Burberry’s interim report calls for reform and revival owing to record profit slowdown. How will the once much-adored, iconic British label restore its place at the top of the fashion food chain?14th November 2024
Burberry Flagship Store on Thursday Afternoon © Photographed by Bridget Devine
Aarin Chiekrie, an equity analyst from Hargreaves Lansdown said, ‘Cost cuts are underway to try and stem some of the financial bleeding, with £25mn of excess material set to be trimmed from the expense line this year’ in a press release. The brand closed 12 stores in the past 6 months, wholesale revenues decreased by 29% and leather goods ‘underperformed’. It's likely the cuts will affect several stores in the form of shop closures and employee redundancies.
Kathleen Brooks, research director at XTB says Schulman will ‘focus on new markets due to the continued slump in demand for luxury goods in China’, so a lot of the expenditure in this area will be cut and reallocated to outerwear sectors in the UK, Europe and US. ‘Burberry’s shares have sunk,’ since Donald Trump's success in the US election which will make it ‘harder for luxury companies who have traditionally relied on China for a chunk of their sales’, says Brooks.
Right now it’s hard to predict the success of Schulman’s cost-cutting programme and whether the brand will continue to show at London Fashion Week, like so many of its predecessors who have abandoned London for its more desirable neighbours like Milan and New York.
When questioned, both Managers of the Burberry Flagship and Bond Street stores declined to comment on the topic, suggesting they too might be feeling pressure from the harsh realities of the brands dismal performance. The Burberry Flagship manager explained, ‘We (the employees) are here to actually do the job of selling and making sure that everything runs smoothly’. Both stores had at least five floor assistants with no customers in sight. However, the Flagship Manager protested, ‘I have no physical time to sit down with you’, which seemed unlikely. Lets just hope that Burberry shows their employees the same loyalty when they start to announce the inevitable redundancies.