Burberry boss ousted as sales plummet 21% in first quarter with firm on track to make a half-year loss
BURBERRY told its boss to pack his bags yesterday, after a heavy slump in sales showed it had fallen out of fashion with shoppers.
The British luxury brand admitted that its sales had fallen by 21 per cent in the first quarter and it was now on track to make a half-year loss — even worse than when its stores were shut during Covid.
As a result, Jonathan Akeroyd has been shown the door just two years after joining Burberry with the promise of accelerating its growth and a vow to refocus on the brand’s “Britishness”.
He has been replaced with immediate effect by American Joshua Schulman, right — its third boss in three years.
Chairman Gerry Murphy admitted the company had gone “too far and too fast” in its attempt to push the luxury brand upmarket at a time when even wealthy shoppers were making cutbacks.
The brand said that it would be more “inclusive and democratic” and it would focus on its strengths of trench coats and soft accessories.
Its third profit warning in a year was accompanied by the news it would have to suspend dividends to investors and cut costs by making around 200 redundancies at its head office.
Shares in Burberry crumpled by 18 per cent to 727.20p on the back of the slew of bad news.
Analysts warn the shrinking value might now make Burberry more vulnerable to a takeover as it is one of the last independent luxury fashion houses.
The desperate need for a turnaround prompted Burberry to hand Mr Schulman an eye-watering £9million pay package, including bonuses.
It is also paying a hefty undisclosed amount to relocate the former Coach and Michael Kors boss from New York to the UK to take the job.
The perks dwarf the £6million “golden hello” Mr Akeroyd received two years ago.
Mr Murphy admitted mis-steps with its £2,500 Knight and £1,850 Rocking Horse handbags but insisted a revival would not be about “dropping prices”.
He said: “Burberry is luxury. We still want handbags at entry and more elevated prices.”
CHIC CHAV DILEMMA
BURBERRY’S chairman Gerry Murphy sounded horrified when asked if a more accessible brand could lead to a Daniella Westbrook “chav check” revival.
“Absolutely not”, he told The Sun.
“Burberry’s check is a symbol of iconic luxury”.
But it has had an identity crisis for the best of the decade and needs to sort it out — or be bought out by a bigger rival.
NatWest gov dip in stake
THE Government’s stake in NatWest is now below 20 per cent — amid rumours Labour will not revive a planned share sale to ordinary investors.
The previous government had been working on a big share sale — that would have handed ordinary investors a free share and a discount to encourage them to take part.
However, it was scrapped due to the General Election.
It is thought Chancellor Rachel Reeves will not revive a programme so wedded to her predecessor, Jeremy Hunt.
Instead, analysts reckon the Treasury will continue to drip-feed shares in the market to reduce its remaining 19.9 per cent stake, worth around £5.4billion.
The Treasury spent £45.5billion bailing out the bank, then called Royal Bank of Scotland, during the financial crisis.
NatWest has started buying back more of its shares — which is also reducing the taxpayer’s stake.
Jobs firm staff cut
ROBERT WALTERS has become the latest recruiter to suffer the pain of a slowdown in the jobs market.
Boss Toby Fowlston said he did not expect a recovery until next year, and as a result the firm has reduced its headcount by 15 per cent to 3,812.
Fees fell by 12 per cent to £84.8million in the second quarter as work had been “weaker than expected”.
The warning follows similar challenges at its rivals Page Group and Hays.
Water bills hit
THE average household water bill is set to rise by £150 over the next five years — much more than regulator Ofwat had claimed.
It said last week bills would be limited to an average £94 rise, or 21 per cent.
However, once forecast inflation has been included bills will actually go up by an average 32 per cent, the Consumer Council for Water said.
Customers at Southern Water will be hit the most in the UK and face an extra £270, or 60 per cent, which will take bills to £722 by 2030.
OCADO shares plunged 10 per cent yesterday after one of its City supporters questioned if it should stay listed.
Analysts at Bernstein said the online grocer turned tech firm would need “significant” amounts of more cash and slashed its valuation expectations.
Bump for Trump
DONALD TRUMP added around £1billion to his wealth as shares in his social media company surged after he survived an assassination attempt.
Trump Media & Technology Group, which owns his Truth Social media platform, surged by 32 per cent, valuing the business at $7.7billion (£5.9billion) yesterday.
Traders are now betting Trump has a better chance of being elected.
A so-called “Trump trade” also lifted the value of Bitcoin and Coinbase yesterday as he has been more favourable to digital currencies.