Burberry's Bold Turnaround: From Job Cuts to Fashion Revivals

Burberry's shares experienced an 18% surge on Wednesday after the luxury brand unveiled a strategy to lay off 1,700 jobs, constituting nearly 20% of its global workforce.

This move is part of a cost-cutting effort to rejuvenate the brand's performance under CEO Joshua Schulman's leadership. Schulman aims to address years of underperformance as compared to other luxury brands.

The job cuts, largely affecting office roles and night shifts at its Castleford trench coat factory, are seen as essential for maintaining production efficiency. Burberry is focusing on marketing its British heritage and core products to recover from past product missteps and excessive price hikes.

CEO Schulman, who previously held roles at Coach and Jimmy Choo, has shifted Burberry's strategy, emphasizing the appealing aspects of British fashion like trench coats and scarves.

This pivot comes after a period marked by financial struggles and multiple leadership changes within the company. Burberry's recent fashion show has strengthened retail relationships, with a tangible increase in orders, signaling positive momentum.

The brand avoided a financial loss for the 2025 fiscal year with an adjusted operating profit of £26 million, beating market predictions. Nonetheless, sales challenges persist, particularly in the U.S. market, a significant region for Burberry.

Despite declining sales figures in several regions, Schulman remains optimistic, emphasizing resilience and strategic adjustments to handle economic uncertainties and consumer trends.

Kate Ferry, the CFO, commented on the potential impact of tariffs, but expressed confidence in the brand's ability to mitigate these through cost-saving measures.

The broader U.S. market weakness poses concerns, as noted by similar struggles faced by peers like Gucci. Burberry's full-year revenue for the period was £2.461 billion, slightly exceeding analyst expectations.

(With inputs from agencies.)