On Wednesday, the Burberry brand announced it will be cutting up to 1,700 jobs, about 18% of its workforce, by 2027 to reduce operating costs by around $133 million. This move is part of new CEO Joshua Schulman’s “Burberry Forward” comeback strategy.
Call it a comeback
The move comes amid a reported operating loss of around $4 million year over year. The brand plans to return to what it does best: trench coats, scarves and British craftsmanship, while lowering prices on certain products.
According to Reuters, the job cuts will mostly impact office workers at its London headquarters. Burberry’s trench coat factory in Castleford, England, will also cut its entire night shift, which Schulman said had caused overproduction, hurting the company’s bottom line.
Between 2017 and 2022, the company tried to slide into higher-end categories, manufacturing upscale leather accessories and handbag bling, but most of it flopped. While refocusing on its classic products, it will also reduce prices on the items it doesn’t feel it has authority in, such as jewelry and home goods.
Schulman’s strategy highlights timeless British luxury, its authority categories, store productivity and a high-performance culture. The announcement received a positive response, with shares jumping 18% on Wednesday.
A trend in backtracking
Burberry is one of many brands on a path to rediscovering itself. Companies like Starbucks, Chipotle and HBO Max—with the two former also taking on new CEOs in 2024—are making drastic changes and realigning their identities.
Starbucks is doing away with stickers in favor of hand-writing customer names on cups as part of its “Back to Starbucks” plan. It’s also cracked down on employee dress code, simplified its menu (another reverse-diversifying move) and is making Starbucks stores cozy again. CEO Brian Niccol said in a statement, “There’s a shared sense that we have drifted from our core,” and he promised to make a return to the brand’s “enduring identity.”
At Chipotle, customers can expect a return to those generous portions and lower prices. CEO Scott Boatwright is championing a “guest obsessed” mindset to improve hospitality. It’s also joining the reverse-diversifying movement, shutting down its spinoff venture Farmesa Fresh.
The streaming service formerly known as “Max” is changing its name once again. The shift from “HBO Max” to just “Max” aimed to deliver the “broadest array of content available,” CEO David Zaslav explained to CNBC in 2023. But the company is realizing the intense dramas it’s always been known for, such as White Lotus, are what’s drawing viewers, so it’s tacking the “HBO” back onto its streaming service’s name.
Putting Burberry’s eggs back in one basket
These major companies aren’t reinventing the wheel or focusing on fresh ideas and new technologies. Instead, they’re remembering what made them successful in the first place and trying to reignite that spark.
In Schulman’s statement on Wednesday, he said, “The continued resilience of our outerwear and scarf categories reaffirms my belief that we have the most opportunity where we have the most authenticity.… I am more optimistic than ever that Burberry’s best days are ahead and that we will deliver sustainable profitable growth over time.”
Reverse-diversifying its product offerings will allow Burberry to focus on the Britishness that made it a once-dominating force in mid-tier luxury and emphasize “executional discipline” to deliver well-crafted products in its core categories.
It’s betting on its iconic Burberry Check and high-quality outerwear to revitalize revenue.
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