LONDON: British luxury brand Burberry on Wednesday said it planned to cut 1,700 jobs, around a fifth of its global workforce, to cut costs as part of efforts to revive its performance, sending its shares higher.
Burberry is in the early stages of a turnaround plan led by CEO Joshua Schulman, who is seeking to reverse the brand's years of underperformance versus luxury rivals.
Schulman, formerly at Jimmy Choo, took over last year and shifted Burberry's strategy and marketing to focus more on iconic trench coats and scarves after the brand was bruised by product missteps, excessive price hikes, and a broader luxury downturn.
"Our brand metrics have all shown a significant improvement in the second half versus the first half," Schulman said in a call with journalists.
The planned 1,700 job cuts globally will affect mostly office roles and a night shift at Burberry's trench coat factory in Castleford, England, will be cancelled, Schulman said, adding the extra shift had resulted in "overproduction".
Burberry shares were up 8% in early trading after the strategy update and better-than-expected results.
Schulman, who replaced Jonathan Akeroyd, is the fourth CEO of the British fashion house in 10 years.
Under Marco Gobbetti, who ran the group between 2017 and 2021 and hired designer Riccardo Tisci, the company had tried to move the brand towards the top end of luxury fashion, without much financial success.
Akeroyd, who took the helm in 2022, pinned his hopes on higher-margin leather accessories and on designer Daniel Lee.
The British label narrowly avoided a loss for its 2025 financial year ending March 29 with an adjusted operating profit of 26 million pounds ($34.55 million), beating analysts' estimate of 11 million pounds.
Fourth-quarter comparable sales were down 6%, better than analysts' average forecast for a 7% decline.
Sales in the Americas and the Europe, Middle East, India and Africa region both declined by 4% compared with last year, while sales in Asia Pacific were down 9%.
A worse outlook for U.S. consumer spending may pose a challenge for Schulman's focus on American shoppers to boost Burberry sales.
"As we got into Q4, the U.S. customer was keeping their momentum but ... things got a little choppy as we headed into February, particularly in the U.S. market," Schulman said told journalists.
The U.S. accounts for 19% of Burberry's business, Schulman added.
Burberry did not address U.S. tariffs specifically in its statement but said "geopolitical developments" were making the economy more uncertain, and it did not give specific targets for its 2026 financial year. - Reuters
