, systemic issues within the brand.  What has gone wrong? “While the entire luxury market is soft, Burberry has been on a particularly painful losing streak. It is one of the few brands, along with Gucci, that has lost market share in luxury fashion compared to the pre-pandemic period,” said Neil Saunders, managing director of GlobalData.  The company’s sales in Asia Pacific decreased 23 per cent with Mainland China dropping 21 per cent during the first quarter of FY25. Meanwhile, sales in South Asia Pacific and South Korea declined 38 per cent and 26 per cent respectively. The fashion house said it expected to report an operating loss for the first half and FY25 operating profit to be below the current consensus if the trend were to persist through the current quarter.  “We moved quickly with our creative transition in a luxury market that is proving more challenging than expected,” said Gery Murphy, chair of Burberry, adding the company is taking “decisive action” to rebalance its offer to be more familiar to Burberry’s core customers whilst delivering relevant newness.  Earlier this month, the British trench coat maker was reported to lay off hundreds of employees.  “Burberry has tried to move itself upmarket, into a more exclusive position, but has done so in a rather schizophrenic and unconvincing way,” Saunders said. “It still relies heavily on mid-priced sales and discounting to drive volume, which is incompatible with the aspiration to move into a higher-priced space.” “There is also a sense that management has been disconnected from the realities of consumer sentiment about the brand and its true position within the market. It is all very well having a new brand vision: but you need to take consumers with you on that journey,” Saunders added. “The result has been poor performance and a strategy that has failed to convince investors and wider stakeholders.” A product of its own making? “In my point of view, Burberry is a perfect example for systematic brand destruction,” said Daniel Langer, professor of luxury strategy at Pepperdine university and founder and CEO of the luxury advisory firm Équité. Langer said the house made a strategic mistake by assuming that just appointing ambassadors, creative directors, and raising prices would give it the perception of a luxury brand. “The trap they fell in is that what the brand is is nothing more than a disguised version of the ordinary luxury [retailer]. This is an area that the brand has been failing for years. Just to build a story on heritage or country of origin is irrelevant. The company has nothing else than itself to blame for the dramatic downfall, which is a continuation of more than a decade of mismanagement. [It] has been systematically eroded, and catastrophic mistakes have been made. Every creative director confused the brand further,” he added.  Meanwhile, Mathew Dixon, partner at DHR Global, said Burberry has struggled to have a convincing strategy since Angela Ahrendts left the business in 2014.  “The board felt they could extract higher prices and build a successful leather goods business, which felt feasible in 2017, but the product produced by Riccardo Tisci fell flat and this should have been the warning that Burberry could not authentically play in the true luxury space,” Dixon said.  The expert added there has been too much external noise about what the brand was perceived to be doing wrong, rather than focusing on the positives.  “Once you add the falling share price into the conversation, this noise becomes deafening and the board has to take action,” he said. “There is suddenly significant consumer scrutiny on luxury prices and Burberry became caught up in a lot of negative press, particularly in Asia – there were 43 million reads on Weibo ridiculing the brand for the hot water bottle with the hashtag #Burberrywontgetapennyfromme.” “The luxury brands that have faced the greatest challenges in China are those that have historically prioritised new customer acquisition in China, over cultivating brand exclusivity and exceptional experiences,” said Jacques Roizen, MD at consultancy company Digital Luxury Group.  “While most of these luxury houses are now working to elevate their brand with a focus on craftsmanship, creativity, and elevated services, their transformation efforts will take time and require rigour and consistency,” Roizen added.  “I have very little confidence in a successful brand unless the new CEO tackles the real issues of the brand which is lack of brand storytelling, lack of a coherence strategy, and discounting,” said Langer.  What does the new CEO mean for Burberry? Schulman will start his new role as CEO on July 17 and directly report to Burberry’s chair Gerry Murphy and the Board of Directors.  “In our view, Schulman has an extremely firm grip on market realities and an intimate understanding of the luxury space. He also has experience in repositioning brands – such as Coach where, despite some painful moments, he delivered a successful turnaround,” said Saunders.  The 52-year-old executive was previously CEO of Michael Kors and brand president at Coach. Schulman also served at Bergdorf Goodman for five years as president.  “For the most part, Schulman’s playbook has been about accessible luxury: that fine middle-ground of avoiding ubiquity and cheapness while still allowing a broad base of consumers to buy into a brand. This is a strategy he is likely to use at Burberry and it marks a welcome step change from the unrealistic push to a more rarefied and uber-luxury brand position.” Dixon said, “Josh Schulman is a smart hire. He’s a renowned merchant, has managed public companies and he knows the accessible space better than most. The challenge will be how he and Daniel Lee align their strategies. “There has been a lot of criticism of Daniel Lee since he joined, but this could be the biggest opportunity for him. If he stays, he has a second chance to reboot Burberry, but there has to be a true partnership with Schulman to utilise his merchandising prowess to pull everything together as a collection for Burberry to stand for something again,” he added.