Burberry’s CFO, Julie Brown, has announced her intention to step down from her position in April of next year. Brown, who has been with the luxury brand for over five years and also holds the role of chief operating officer, will be leaving to pursue opportunities in a different industry. This departure adds to the ongoing leadership changes at Burberry, as the company faces challenges in keeping up with competitors.
Earlier this year, former CEO Marco Gobbetti, who had implemented a long-term repositioning strategy for the brand, left after approximately five years in the role. The new CEO, Jonathan Akeroyd, now has the task of restoring Burberry’s sales to pre-pandemic levels. In a statement, Akeroyd acknowledged Brown’s significant contribution to the company’s growth and expressed confidence in building on the foundations she helped establish. Burberry is currently in the process of finding a successor for Brown.
Known for its iconic check pattern, monogram, and trench coats, Burberry has faced a 9% decline in its shares over the past year, reflecting the challenges it faces in the market. This downward trend continued with Burberry shares down approximately 4% in morning trading. The broader market weakness, with the blue-chip FTSE 100 index down 1.6%, may have contributed to this decline.
The new CFO will encounter several challenges, including weak demand and rising costs. Lockdowns in China, Burberry’s largest market, and a sudden downturn in the Americas have impeded the company’s growth. As a result, Burberry experienced limited sales growth of just 1% in the first quarter of this year. Furthermore, transportation, commodity, and labor costs have been on the rise, posing additional obstacles. However, the company has been able to navigate these challenges to some extent by prioritizing procurement efficiencies.
While concerns about changing demographics and slowing growth in China and the United States persist, other consumer companies like Diageo and Hermes have reported success in selling their high-end products. These companies anticipate continued profitability from their luxury offerings. How Burberry will navigate these trends and the strategies the new CFO will implement to drive growth and enhance profitability remain to be seen.
Useful links:
1. Burberry’s Board of Directors
2. Burberry Investor Relations
