^{Source: Ealling Times}

British luxury fashion house Burberry has announced plans to eliminate approximately 1,700 positions—around 18% of its global workforce—by 2027. This move is part of a broader £100 million cost-saving initiative under the "Burberry Forward" strategy, aimed at revitalizing the brand's performance amid declining sales and profits. The restructuring will primarily affect office-based roles, retail staff, and workers at the Castleford manufacturing facility in England.‍

Financial Performance

For the fiscal year ending March 29, 2025, Burberry reported a 17% decline in revenue to £2.5 billion, down from £3 billion the previous year. The company also posted an operating loss of £3 million, a significant drop from the £418 million profit recorded in the prior year. Despite these challenges, Burberry's adjusted operating profit of £26 million surpassed analyst expectations of £11 million, indicating some resilience in its core operations. ‍

Strategic Shift: "Burberry Forward"

Under the leadership of CEO Joshua Schulman, who joined the company in July 2024, Burberry is implementing the "Burberry Forward" strategy to reconnect with its heritage and core customer base. The plan focuses on:‍

• Product Realignment: Emphasizing iconic items like trench coats and scarves while introducing a broader range of pricing to appeal to a wider audience.
• Brand Identity: Reinforcing British heritage and authenticity in marketing campaigns, such as "It's Always Burberry Weather" and "Wrapped in Burberry."
• Operational Efficiency: Streamlining procurement and real estate operations to achieve £100 million in annual savings by 2027.

Schulman stated, "We are acting with urgency to course correct, stabilize the business, and position Burberry for a return to sustainable, profitable growth."

Market Challenges

Burberry's performance has been impacted by a global slowdown in luxury spending, particularly in key markets like China and the United States. In the first half of fiscal year 2025, comparable store sales declined by 25% in Asia Pacific, 13% in EMEIA (Europe, Middle East, India, and Africa), and 21% in the Americas.

Additionally, escalating U.S.-China trade tensions have introduced tariff-related uncertainties, affecting consumer sentiment and purchasing behavior. Burberry has acknowledged these risks but has not provided specific financial guidance regarding potential tariff impacts.

Outlook

While Burberry faces significant challenges, the company's leadership remains optimistic about the future. The strategic focus on heritage products and operational efficiency is designed to navigate the current economic landscape and position the brand for long-term success.

Investors responded positively to the restructuring plans, with Burberry shares rising by 8.5% following the announcement. The company aims to return to £3 billion in annual revenue over time, leveraging its strong brand identity and renewed focus on core products.

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