Burberry appoints a new CEO as the fashion house warns it expects a first-half operating loss

LONDON (AP) — British luxury fashion house Burberry said Monday it has appointed Joshua Schulman, formerly head of Michael Kors and Coach, as its new chief executive officer as the company warned it expected to record an operating loss in the first half of the year amid slumping retail sales.

Burberry said Schulman, 52, replaces Jonathan Akeroyd, who would step down and leave the firm with immediate effect “by mutual agreement with the board.”

The unexpected announcement came as Burberry said its first-quarter revenue was down 21%, with sales declining in all regions — including China, the Americas and Europe — except in Japan. It said full-year earnings will also be lower than expected, and suspended its shareholder dividend payouts.

Burberry shares plunged more than 11% soon after markets opened Monday.

“Our first-quarter performance is disappointing," chair Gerry Murphy said. “We moved quickly with our creative transition in a luxury market that is proving more challenging than expected.”

“The weakness we highlighted coming into 2024-25 has deepened and, if the current trend persists through our second quarter, we expect to report an operating loss for our first half," he added.

Akeroyd, formerly head of Gianni Versace, took the top job at Burberry in April 2022. Within months, the company saw the departures of Burberry's chief financial and operating officer as well as its creative director, Riccardo Tisci, who was replaced by Daniel Lee in 2022.

The heritage brand, best known for its checked pattern and classic trench coats, said it now hoped to reconnect with its “core customer base," emphasizing the appeal of its timeless products while “delivering relevant newness.”

Global sales of luxury goods are projected to be flat this year following a pent-up post-pandemic spending surge.

Murphy said Schulman is a "proven leader with an outstanding record of building global luxury brands and driving profitable growth. His extensive experience in luxury and fashion will be key to realising Burberry’s full potential.”

Schulman was credited with driving sales and brand transformation at handbag brand Coach. Before that he was president of New York department store Bergdorf Goodman and had also headed luxury shoemaker Jimmy Choo.