On May 14, British luxury brand Burberry announced its financial results for the fiscal year ending March 2025, reporting a 17% year-on-year drop in revenue to £2.461 billion and an operating loss of £3 million. This marks a sharp downturn from the previous year’s £418 million operating profit, reflecting the broader slowdown in the global luxury market.
Retail performance was particularly impacted, with comparable store sales falling by 12% for the full year. While the first half saw a steep 20% decline, the second half narrowed to a 5% drop, attributed in part to revamped advertising campaigns and adjustments in brand strategy. Core categories such as outerwear and scarves performed relatively well under the circumstances.
In response to the challenging business environment, Burberry unveiled a new cost-cutting initiative that could result in up to 1,700 job reductions globally by fiscal 2027. This new plan adds to a previously announced £40 million savings program in November 2024, aiming for an additional £60 million in savings, bringing the total target to £100 million.
The restructuring will primarily affect head office roles, especially in London, while store operations will undergo shift realignments. Additionally, the company is expected to eliminate the night shift at its trench coat manufacturing facility in Castleford, Yorkshire, potentially affecting around 150 skilled workers.
As part of its turnaround efforts, Burberry is advancing its mid-term strategic plan, Burberry Forward, which was introduced in November 2024. The strategy redefines the brand through the lens of its original founding principle—creating clothing that protects against the weather—and centers on a new brand vision: Timeless British Luxury.
The initiative focuses on four key pillars:
- Brand revitalization
- Product focus with outerwear at the core
- Distribution aligned with both product and customer strategy
- Reigniting a high-performance culture
At the heart of this strategy lies the belief that “the greatest opportunities exist where the brand’s authenticity is strongest.” This philosophy has led to renewed emphasis on iconic categories such as trench coats and scarves.
Chief Executive Officer Joshua Schulman commented: “Our customers are responding to our Timeless British Luxury brand expression. With improvement in brand sentiment, we will be ramping up the frequency and reach of our campaigns as our Autumn and Winter collections arrive in store. The continued resilience of our outerwear and scarf categories reaffirms my belief that we have the most opportunity where we have the most authenticity.”
In terms of regional performance, Asia Pacific saw the most significant declines, particularly in Mainland China and South Korea. In the UK, the removal of VAT refunds for tourists in 2021 further dampened sales from overseas visitors.
The luxury sector as a whole continues to face headwinds, with major groups such as LVMH and Kering also experiencing stock declines. Burberry has lost approximately 25% of its market value over the past year.
Meanwhile, speculation around the possible departure of Creative Director Daniel Lee has been put to rest, as the company confirmed there will be no change to his current role under the ongoing transformation.
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