Investors have high hopes for Burberry to start showing signs of progress in its turnaround when the British luxury brand reports sales for the crucial festive season this Friday.
Joshua Schulman, who took the reins as CEO six months ago, has promised to build the brand back and reclaim lost market share, a tough ask in a struggling luxury market, by focusing on products like trench coats that Burberry is best known for.
Burberry shares have gained more than 70% since hitting a near 15-year low at the start of September, as investors bet that pessimism around the brand has peaked and Schulman will be able to drive sales up again.
Analysts expect Burberry to report a 12% decline in comparable sales for the quarter to end-December, according to a company-compiled consensus estimate, an improvement from the 20% drop it reported for the six months to end-September.
‘Focus on America’
U.S. shoppers could be a catalyst for Burberry if it improves its visibility there, something Schulman has hinted is in his plans, telling investors in November that there is “a lot of focus on America” where the brand has been relatively quiet.
Burberry’s pricing strategy reflects an expectation of stronger U.S. demand. It increased its most expensive price point by 115% in the U.S. in the year to November 2024, far more than in Italy or China, according to pricing data firm Luxurynsight.
Anna Farmbrough, portfolio manager at Ninety One in London, said Schulman, who is American, is “very excited” about the opportunity for Burberry in the United States, and his strong relationships with department stores from his time heading up Coach could help the brand gain more prominence. “Burberry has never cracked the U.S.,” said Farmbrough. “If they can really improve their perception there it’s a big opportunity for them.”
They won’t be alone, though: luxury brands everywhere are hoping U.S. consumers spend more on designer fashion and expensive handbags as tax cuts and the strong stock market deliver a boost for wealthy Americans.
Burberry’s new advertising campaigns highlight its heritage trench coats and scarves more than bags and shoes, as it seeks to win back customers Schulman says were alienated by less recognisable designs and higher prices.
The fact Schulman gave no precise medium or long-term financial targets gives the company time to build back without risking investors’ disappointment, said Thomas Chauvet, analyst at Citi, adding that he feels the turnaround plan is sensible. “It’s a return to the fundamentals, the DNA of the brand, but it’s also a projection towards the future where, in an industry that is more and more competitive, brands must focus on their iconic products,” said Chauvet.
Trenches and scarves account for between 35% and 40% of sales and have had higher profitability historically than other categories, he added.
Burberry’s immediate goal is a return to GBP3 billion ($3.7 billion) in annual revenue, a level it last achieved in its 2022-2023 financial year. That will take time: analysts currently expect sales in the financial year to end-March 2025 to come in at GBP2.39 billion.
Burberry launched a big sale on its website late last year, causing some concern among investors, Farmbrough said, adding that she believes this was to clear old stock and has not impacted full-price sales of new collections.
Giving hope to many middle-aged men, David Beckham (49) stars in the new Boss intimates campaign, as the fashion brand stages a major launch of its new Boss One Bodywear collection.
Designed by the Team Laird agency, the campaign’s directed by fashion photography duo Mert and Marcus who apply their distinctive cinematic style to both video and stills of Beckham, who’s first seen pulling up in a classic sportscar and entering a New York City warehouse apartment. On screen, Beckham invites the viewer in (to the beat of the rock anthem In the Air Tonight) before revealing himself wearing just the new black Boss One Bodywear trunk.
The launch is supported by a 360-degree marketing campaign. In a brand first Beckham will appear before audiences in cinemas and at home, appearing in campaign clips on the big screen and on streaming platforms such as Amazon Prime, Netflix, HBO Max, Paramount Plus, and Sky TV.
Stills of Beckham will appear on billboards and in selected high-traffic locations, as well as in Boss stores and department stores around the world. On social media, the campaign will see close to “100 talents of the moment” show off their Boss Ones across various platforms.
Also as a debut for the brand, vending machines will be placed at key locations in Europe and the US, selling hero products from the collection “in a fun, interactive way”. Additionally, over 100 dedicated pop-ups will appear in premium retail locations worldwide, featuring the complete first drop.
The collection consists of men’s underwear essentials, including trunks, briefs, tank tops and T-shirts in minimalist black and white. Crafted from a blend of cotton and elastane, the selection “offers all-day comfort and confidence”.
It will be available on boss.com, at dedicated pop-ups, at Boss stores globally, and via selected wholesalers from 1 February.
Daniel Grieder, CEO of Hugo Boss, said: “The launch of the Boss One Bodywear collection marks another milestone and a new chapter in our long-term strategic partnership with David Beckham.
“It is also a testament to our joint dedication to style and excellence. Bodywear is an iconic product group, and with this campaign, we aim to inspire customers and fans of the brand worldwide more than ever.”
With cost remaining a decisive factor for consumers, M&S said Friday (January 31) it’s continuing to cut prices of over 300 “family favourite” products with kidswear the latest target.
The high street retailer said it “re-affirms its commitment to delivering trusted value and everyday low prices on the products that matter most to its 32 million customers”.
The latest cuts include an up to 20% price reduction on over 100 products from its ‘everyday essentials’ Kidswear range.
Key pieces include its Cotton Rich Hoodie and Joggers as well as range of Sweatshirts, Leggings and T-Shirts which now start from £5.50, with the retailer saying the reduction in price will not compromise on the “quality or high sourcing standards it is known for”.
Alexandra Dimitriu, Kidswear director, Clothing & Home, said: “Now more than ever, customers are looking for trusted value. When it comes to clothing, we know value is more than just the product’s price – they also want confidence that it is made well and made to last and offers versatility.”
M&S reported positive figures for its festive trading period with total group sales increasing 5.6% to £4.064 billion, but much of the strength was concentrated in the Food area with Clothing, Home & Beauty, rising just 1% to £1.305 billion, with like-for-like sales rising ahead of the market at 1.9% as underlying sales grew 2.6%.
Burberry announced a key appointment on Friday with the luxury business saying it will soon have a new chief information officer.
It has appointed Charlotte Baldwin to the role and she’ll join the business at the end of March. Baldwin will be responsible for leading Burberry’s global technology team and will join the executive committee. She’ll report directly to Burberry CEO Joshua Schulman.
He described her as “a highly experienced technology and digital leader with a track record of leading large-scale digital transformation”.
She hasn’t previously worked in the luxury fashion sector but has wide-ranging experience across some major-name businesses in Britain.
She’s currently the global chief digital and information officer at coffee chain Costa Coffee where she oversees the company’s technology, digital and data organisation.
Prior to joining that firm, she was the chief information, digital and transformation officer at private healthcare giant Bupa’s Bupa Insurance unit. She’s also held senior roles at Freshfields Bruckhaus Deringer, Pearson and Thomson Reuters.
Burberry has been navigating a tough period of late and Schulman joined in the top job last year, tweaking the firm’s strategy. His approach seems to be paying off with the company last week porting improved results, although the turnaround is still undeniable a work in progress.