London: Burberry’s turnaround strategy will be tested as the British fashion house presents its latest designs at London Fashion Week.
The brand has turned to cultural icons such as Oscar-winning actress Olivia Colman and Oasis frontman Liam Gallagher to champion its British heritage and iconic trench coats.
American CEO Joshua Schulman, who took charge in July 2023, has overhauled Burberry’s marketing to project a version of Britishness that resonates globally. Schulman has been critical of former leadership decisions, particularly product and pricing choices, arguing that some previous collections carried a ‘niche aesthetic’ that was not instantly recognizable as Burberry.
Anna Farmbrough, portfolio manager at Ninety-One, which holds shares in Burberry, said that, “It felt very high fashion and quite edgy, and the collections that you’re seeing now are very classic, very clear heritage designs.”
Creative director Daniel Lee, appointed in September 2022, has seen his responsibilities shift under Schulman. The CEO has worked to link design more closely with commercial operations, sparking speculation about Lee’s long-term future at the company.
“Josh has normalised the relationship between a chief executive and a creative director. It’s obviously important to Burberry who their creative director is, but it shouldn’t define the business,” stated Jeremy Smith, UK equities portfolio manager at Columbia Threadneedle in London.
Burberry’s refreshed strategy includes social media campaigns highlighting celebrities strongly tied to British identity, such as Colman, who portrayed Queen Elizabeth II in Netflix’s The Crown, and cultural references like the Glastonbury music festival.
The brand also gained global political visibility when the US First Lady, Melania Trump, stepped off Air Force One in London wearing a Burberry trench coat during President Donald Trump’s state visit to the UK.
“Burberry’s use of social media has been very, very clever, and it’s very powerful because it can change perceptions quite quickly and achieve quite broad penetration, whereas product positioning in the luxury world takes a long time to change the way people think,” Smith added.
Since Schulman’s appointment, Burberry’s shares have surged by 50 percent, boosted by a 20 percent workforce reduction and investor confidence in the new direction. However, the brand’s critical test lies ahead in the autumn and winter months, its key revenue-generating period.
While Burberry has reported negative like-for-like sales growth for seven consecutive quarters, the most recent decline was just 1 percent year-on-year. Analysts expect sales to return to growth this quarter, suggesting the early success of Schulman’s revival plan.
“You would hope that they would be able to get back to where they were historically, in terms of sales, and I think they have a very good chance, under Josh, of growing beyond that,” Farmbrough said.
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