Burberry, the iconic British luxury brand, recently announced a better-than-expected 4% drop in comparable store sales for the third quarter. This positive performance was driven by strong holiday shopping in the United States. Signaling a potential turning point in the company’s turnaround efforts. Investors responded enthusiastically, sending Burberry’s shares up by 12%. This positive news also lifted the shares of other luxury players like Kering and LVMH. Suggesting renewed confidence in the luxury market.
Schulman’s Strategy: Back to Basics
CEO Joshua Schulman, who took the helm at Burberry just six months ago, is leading the charge with a renewed focus on the brand’s heritage. Schulman believes that by emphasizing Burberry’s classic products. The brand can recapture customers drawn away by less recognizable designs and higher price points, just like it captivates with its signature trench coats and cashmere scarves.This strategy appears to be resonating with shoppers, as evidenced by the strong performance of these core items during the holiday season.
Schulman highlighted the success of the brand’s festive advertising campaigns, which showcased these classic products. He also noted a significant increase in new customer acquisition in December, the first such growth in over two years. These positive signs indicate that Burberry is regaining its desirability among luxury consumers.
A Global Improvement in Sales
The positive momentum wasn’t limited to the United States. Burberry saw improved sales across all regions. In the Americas, sales grew by 4%, with the newly refurbished New York flagship store on 57th Street playing a key role.
Asia Pacific, which had experienced a significant decline in the previous quarter, showed signs of recovery with a 9% drop in sales. Similarly, the Europe, Middle East, India, and Africa (EMEIA) region saw a more moderate decline of 2%.
China: A Key Market Shows Signs of Stabilization
Burberry also reported encouraging signs from China, a crucial market for the brand. CFO Kate Ferry noted a stabilization in consumer demand, which is a positive development after a period of uncertainty. Burberry recently opened a new store in Beijing, further demonstrating its commitment to the Chinese market.
Looking Ahead: Profitability and London Fashion Week
With these positive results, Burberry is now more confident in its ability to achieve profitability for the full financial year. The company aims to offset the adjusted operating loss of 41 million pounds reported in the first half.
All eyes will be on Burberry’s Autumn/Winter 2025 collection, set to be unveiled at London Fashion Week on February 24th. Amidst rumors about creative director Daniel Lee’s potential departure, the upcoming collection will be closely watched for signs of the brand’s continued evolution under his creative direction. Both Schulman and Ferry declined to comment on the speculation surrounding Lee’s future, adding another layer of intrigue to the upcoming show.
