Burberry, the renowned British Fashion brand, is facing difficult times.

In a survey conducted last year by Bloomberg involving 17 M&A desks, fund managers, and analysts across London, Burberry emerged as the potential takeover target, especially as investors sought bargain opportunities in the luxury market.

In September, it was delisted from the FTSE 100 index, which includes the 100 largest UK companies by market value, reaching its lowest level since 2009.

Though they were refuted, speculations of a possible takeover by Moncler recently caused a brief 7% increase in Burberry’s share price. According to Miss Tweed which first reported this speculation, LVMH, the parent company of Moncler, sought to conquer the outdoor market by acquiring Burberry. Despite the denial, the persistence of these rumours and Burberry’s removal from FTSE 100 indicate the brand’s precarious situation.

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Challenges in the Chinese Market and Industry-Wide Struggles

One of Burberry’s biggest challenges is the luxury market’s slowdown, particularly in China. Burberry’s reliance on the Asia-Pacific market, which accounts for 43% of its revenue, has made it susceptible to economic shifts.

Chinese consumers have displayed stagnating consumption trends, partly due to a drop in property values, which has led to an increase in household savings and more cautious shopping behaviour.

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Frequent Changes in Management and Shifts in Strategy

While Akeroyd and Lee were commended for emphasising Britishness, their pricing strategy did not resonate commercially, which resulted in a disappointing first quarter with a 22% year-on-year revenue drop. Eventually, this led to Akeroyd’s departure after less than two years.

In 2022, Burberry hired Jonathan Akeroyd as CEO after renowned CEO Marco Gobbetti left for personal reasons. With creative director, Daniel Lee, Akeroyd aimed to reestablish Burberry’s Britishness and raise its profile. Their approach to raising goods pricing, however, brought  unforeseen difficulties. The iconic knight bag from Daniel Lee debuted at £2,490, while handbags that were previously priced at roughly £990 were hiked to an average of £1,700.

This price shift, coupled with a significant rebranding effort under Daniel Lee, including a logo redesign, drew mixed reactions.

While Akeroyd and Lee were commended for emphasising Britishness, their pricing strategy did not resonate commercially, which resulted in a disappointing first quarter with a 22% year-on-year revenue drop. Eventually, this led to Akeroyd’s departure after less than two years.

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Joshua Schulman’s Bold Approach

Following Akeroyd’s resignation, Burberry appointed a New CEO Joshua Schulman. Schulman formally noted that Burberry’s brand strategy deviated too far from its classic core collection at a high price point and launched a £40 million cost-cutting plan in an attempt to stabilise the company.

He also discusses his aim of returning the brand to its roots.

Investors responded well to this statement, as seen by the 16% increase in shares. Nevertheless, the business is still in an unstable state, and the decrease in demand for luxury goods presents ongoing challenges. In response, Burberry is working to restore itself as a symbolic brand of England with Britishness, with efforts to make its pricing more accessible and reconnect with its heritage.

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‘Wrapped in Burberry: Friends & Family’ Campaign – A Strategy for Accessibility

In an attempt to embrace the British essence of the brand, Burberry’s latest campaign, “Wrapped in Burberry: Friends & Family,” celebrates the warmth of the winter season.

Set against the backdrop of a typical British residence, the campaign highlights the brand’s heritage by featuring British actors, including David Tennant and Alex Hassell, along with London-based artist Slawn, his partner Tallula Christie, and their children. The campaign captures scenes of family, friends, and couples clad in Burberry, reflecting the theme “where the home is at the heart of making memorable festive moments.”

Long-time Burberry clients, Drs. Herschel and Lilly Stoller, were also featured in the campaign. Having been Burberry customers for over 20 years, they represent the brand’s loyal customer base, further reinforcing Burberry’s image as an accessible, familiar, and authentically British brand. By bringing in real-life figures with longstanding relationships to the brand, Burberry seeks to emphasise its British heritage and connect with a broader audience.