Burberry boss ousted after sales slump: Shares crash to lowest level since 2010

Burberry shares crashed to their lowest level since 2010 as its boss left after just two years at the helm.

On a bleak day for the troubled British fashion label, it said Jonathan Akeroyd would be replaced by former Michael Kors and Jimmy Choo chief Joshua Schulman, who was handed a £9.2million ‘golden hello’.

The FTSE 100 firm also scrapped its dividend as it warned it was on course to rack up a loss for the first half of the year.

Shares plunged 16 per cent – taking the value of the stock to almost 50 per cent of what it was at the start of this year and to 70 per cent of last year’s peak.

The company – famed for its check designs and trenchcoats – is now valued at just £2.6billion having been worth £5.7billion when Akeroyd took over in March 2022.

Chairman Gerry Murphy said his replacement was ‘a proven leader’ with a CV that would be ‘key to realising Burberry’s full potential’.

Schulman led handbag maker Michael Kors from 2021 to 2022 and luxury shoe brand Jimmy Choo between 2007 and 2012.

He will be paid as much as £9.2million for taking on the job – including £3.6million in shares on top of his £1.2million salary and £4.4million in potential bonuses.

Akeroyd was paid a £1.1million salary last year but did not receive a bonus due to how badly the group had fared.

His departure was announced with a shock sales update that showed Burberry revenues in the first quarter of its financial year to June 29 came in at £458million – down 21 per cent on a year earlier.

One of its largest markets, China, has been especially tough with sales down 23 per cent in the Asia Pacific region.

It warned it was heading to a loss for the first half and lower than expected profits for the full year if trading continues to be this poor.

Murphy insisted it was taking ‘decisive action’ to appeal to customers after a ‘disappointing’ performance.

As well as suspending dividend payments to shore up its balance sheet, it said it was looking at slashing jobs and making other cost savings.

Akeroyd tried to take the brand more upmarket and slashed prices to shift unsold stock – but this seemed to have made it lose its must-have allure.

In recent collections, creative director Daniel Lee has attempted to take the label back to its origins by focusing on its trademark check print and staples such as the £1,900 beige trench coat.

But the collapse of Burberry shares has sparked speculation it could be snapped up by a rival or that private equity predators could swoop on the 168-year-old firm.

...and its Footsie future is at risk too

The collapse in Burberry shares has put it on course to be kicked out of the FTSE 100 index of Britain’s largest listed companies.

Analysts said it is likely to lose its status as a blue-chip stock at the next review in September having seen its value tumble to just £2.6billion.

The luxury goods sector has suffered in the face of a slowdown in demand, especially in China, but Burberry has fared worse than its rivals.

Its shares are down 47 per cent this year while British firm Mulberry is down 41 per cent.

By contrast, on the Continent, Cartier owner Richemont is up 18 per cent, Hermes is up 10 per cent while Louis Vuitton owner LVMH is down just 4 per cent.

Even Kering – the group behind troubled label Gucci – is down only 19 per cent.

Susannah Streeter of Hargreaves Lansdown said Burberry is ‘not yet sharp enough to reach the heart of the more resilient end of the luxury market’.

Burberry and Mulberry also pointed to the absence of VAT-free shopping for visitors to its UK stores.

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