UK fashion group Burberry has replaced its boss as it looks to halt a slump in sales.
The company said Joshua Schulman, the former boss of US brand Michael Kors, will take over as chief executive, replacing Jonathan Akeroyd, who is leaving Burberry “with immediate effect”.
The change of leadership came as Burberry reported a sharp fall in sales and warned that if current trends continue its profits will be below expectations.
The company also said jobs cuts were on the cards, with a few hundred posts at risk.
Burberry – famed for its distinctive camel, red and black check pattern – said retail revenues fell by 21% in the three months to 29 June.
Chairman Gerry Murphy called the figures “disappointing” with the luxury market “proving more challenging than expected”.
The company is suspending dividend payments to shareholders for the current financial year as it looks to save cash.
Mr Akeroyd had attempted to move Burberry more upmarket, but Mr Murphy said the brand was now “taking decisive action to rebalance our offer to be more familiar to Burberry’s core customers whilst delivering relevant newness”.
The actions Burberry was taking, including cutting costs, would improve its performance in the second half of the year, Mr Murphy said.
Earlier this month, reports said hundreds of jobs at the company could be cut.
Burberry’s chief financial officer, Kate Ferry, she could not comment on job losses as a consultation process was under way, but added that a few hundred roles were at risk globally.
Burberry’s sales have been struggling amid a downturn in demand for luxury goods, with trading in China and the Americas seeing some of the biggest falls.
In its latest update, Burberry said sales in the Asia Pacific region were down 23% from a year earlier with sales in mainland China falling 21%. Sales in the Americas also dropped by 23%.
In May this year, the company had announced a 40% fall in full-year profits.
Burberry is not the only luxury brand to suffer from the downturn. In March, luxury goods company Kering issued a profit warning after it said demand for its Gucci brand had slumped in China.
Mr Murphy said he was “pleased” with Mr Schulman’s appointment.
“Josh is a proven leader with an outstanding record of building global luxury brands and driving profitable growth,” he added.
Mr Schulman, who was also head of Jimmy Choo in London between 2007 and 2012, said he was “deeply honoured” to lead Burberry.
“Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation.”
Shares in Burberry have more than halved over the past year, and they fell a further 11% when trading began on Monday.
“It’s super tough for luxury brands reliant on aspirational shoppers,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown.
“They aren’t as insulated as the super-rich from the pressures whipped up in an era of high interest rates and an uncertain economic climate.”
She added that the focus for the new boss would be on returning to the core image, of its classic coats and check pattern.
“Chopping and changing collections to attract the eye of hard-to-please fashion editors can confuse customers and there is set to be a return to the brand’s core principles and the traditional focus on dressing the elite,” Ms Streeter added.
