Recent reports indicate significant job cuts at Burberry, affecting as many as 400 positions.
- Burberry’s profits have sharply declined, with a 34% decrease in adjusted operating profit to £418 million for the fiscal year ending March 2024.
- The brand’s restructuring plans, announced in late June, include potential redundancies for UK staff due to financial pressures.
- Burberry’s stock market value has plummeted by over a third this year, risking removal from the FTSE 100.
- Asia Pacific sales, particularly in China, have significantly decreased, contributing to the brand’s struggles.
British luxury brand Burberry is reportedly considering significant job cuts, with up to 400 positions at risk, primarily at its UK offices. The decision follows a dramatic decline in the company’s profits, with a 34% year-on-year drop in adjusted operating profit to £418 million for the year ending 30 March 2024.
In response to the financial downturn, Burberry announced restructuring plans in late June. Staff were informed that they might face redundancy or be required to reapply for their roles. The restructuring is a direct consequence of the brand’s financial difficulties and is predominantly impacting roles based in the UK.
Burberry has also experienced a significant decline in its stock market value, losing over a third of its value this year. This downturn places the company at risk of being delisted from the FTSE 100, reflecting broader challenges within the luxury goods market.
The downturn in market performance is further exacerbated by declining sales in Burberry’s largest market, the Asia Pacific region, where fourth-quarter sales dropped by 17%, including a 19% decrease in mainland China. This contrasts with previous expectations where the region was anticipated to drive post-Covid recovery.
CEO Jonathan Akeroyd acknowledged the challenges, stating, “Executing our plan against a backdrop of slowing luxury demand has been challenging.” In response to these challenges, Akeroyd waived his bonus as the company focuses on refocusing its brand image, evolving its products, and strengthening distribution channels.
Burberry’s current financial and operational challenges highlight the broader impacts of slowing luxury demand on the industry.
