The British luxury fashion group Burberry has not only promised massive job cuts with the recent business figures, but also gave an insight into the progress of its turnaround plan. With the realignment launched last year, CEO Joshua Schulman wants to correct the consequences of a failed high -price strategy as well as frequent change in management and design.
At the beginning of the first complete financial year under Schulman, the first signs of improvement seem to indicate-even against the background of the worldwide cooling demand in the luxury segment and growing trade policy uncertainties, including potential US tariffs.
Job cuts at the London HQ and in the traditional factory
At the center of the restructuring plan is a return to the roots of the brand, and that is still accompanied by an extensive reduction in costs. It became clear on Wednesday that further savings of 60 million British pounds will be added within the next two years. Overall, Burberry now expects potential overall savings of up to 100 million British pounds.
As part of his ongoing savings program, Burberry announced that he wanted to reduce up to 1,700 jobs in the coming financial year. This corresponds to around a fifth of the global workforce. As CEO Jonathan Schulman explained in a call with analyst: on the inside on Wednesday, the cuts primarily affect the global headquarters of the company – led by the London headquarters. Positions are also to be reduced by reorganizing the plans for deployment in stationary trade, but branch closures are currently not planned. Burberry also wants to achieve savings in purchasing and in the real estate sector.
Another step affects the traditional factory in Castleford, Yorkershire, where Burberry produces its iconic trench coats. Despite the importance of the outwear category for the future growth of the brand, the night shift will be set there. This step takes place in advance of planned comprehensive investments in the modernization of the Victorian work, which is to be implemented in the second half of the current financial year.
“There has been a structural overcapacity in our factory for some time – this is not sustainable in the long run,” said Schulman. “This decision is intended to secure our British production in the long term. We will invest significant means in the renovation of the production facility later.”
Tradition as a recipe for success?
The commitment to tradition is in line with the strategic course under the name Burberry Forward. This not only focuses on quality and origin, but also emphasizes the British identity of the brand in design, communication and brand management. Tradition is not only very important in production, but is increasingly shaping the creative self -image of the brand. The intensive focus on timeless British luxury is of particular importance, since this unique selling point helps to distinguish the brand from the currently dominant French and Italian labels.
In this context, the CEO emphasized that there were the greatest chances where the most authenticity also prevails. He was convinced that Burberry has the potential more than ever to return to a powerful luxury brand. The company has all the necessary prerequisites: a clear original mission, manual skills in a central product category and brand codes that enable an extension beyond the core business.
“We are talking about a company that has achieved an annual turnover of three billion British pounds in the recent past – with a gross margin of 70 percent and an operational margin in the high tens area. I am firmly convinced that we can not only reach this level, but even surpass this level,” said the CEO with reference to the success of the success of the success Angela Ahrendts.
In addition, they refer to the spirit of the country of origin and skillfully combine tradition with innovation in brand identity. These properties as well as the width, universal attraction on a luxury consumer: inside are decisive for future success.
Does the turnaround plan wear the first fruits?
Despite the business results described by Schulman himself as “challenging”, the now fourth CEO expressed itself optimistic about the company’s progress within ten years: “Ten months after the beginning of my term of office, I could not be more satisfied with the progress that our team makes in brand development. We move from modern British luxury to timeless British luxury.”
But not only Schulman seems to believe in the success of his efficiency program. Since the publication of the annual results and the planned job cancellations, the Burberry share on Wednesday has had a double-digit price increase, a possible sign of the trust of the capital markets in the strategic realignment of the house.
A trust that also announces customers: the brand’s inside, because the fashion show for autumn/winter 2025 marked a turning point for Burberry. This was not only received positively by the media and customers: but also led to a revival in the trade. After two years of reluctance, wholesale partners increased: their order volume in the USA and Europe again in double digits, said Schulman.
Preparations for tariffs
With a view to the coming months, the focus is now clearly on the revival of the desirability of the brand and a further improvement between Margen and Cashflow. In addition, the company is convinced that with the cost cuts that have already been initiated, it is well prepared for possible economic challenges-for example in the course of new US tariffs.
“Regardless of how customs policy ultimately develops – through the savings announced today, we have the necessary set screws to cushion possible effects,” said CFO Kate Ferry, who emphasized that Burberry was “well positioned” in order to be successfully acting even under changed framework conditions.