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Burberry has outlined a proposal to lay off around 20 per cent of its workforce (1,700 jobs) as it seeks to strip out an additional £60 million in costs over the next two years.
The measures were revealed as Burberry reported on Wednesday that its revenue fell 15 per cent year-on-year at constant exchange rates to £2.46 billion in the year ended 29 March 2025 — beating analyst expectations. Comparable retail sales were down 12 per cent, though the second half of the year showed improvement (falling 5 per cent, versus 20 per cent in the first half).
Gross margin was 62.5 per cent, down from 67.7 per cent last year, and its adjusted operating profit tumbled 88 per cent to £26 million. Still, shares rose 8 per cent in early trading in response to the green shoots of its turnaround.
Burberry delivered £24 million in cost savings in the second half of 2025. The proposed job cuts will primarily affect those working in its head office, but also at some stores and its Castleford factory, which is eliminating its night shift. Other cost-saving measures include stricter inventory management and better aligning the number of sales associates present at key stores with peak traffic hours. The company said its focus now is on “reigniting brand desire, as a key requisite to growing the top line”, along with improvements to margins and cash flow.
“Our customers are responding to our timeless British luxury brand expression,” said CEO Joshua Schulman in the earnings call. “With improvement in brand sentiment, we will be ramping up the frequency and reach of our campaigns as our autumn and winter collections arrive in store. The continued resilience of our outerwear and scarf categories reaffirms my belief that we have the most opportunity where we have the most authenticity. While we are operating against a difficult macroeconomic backdrop and are still in the early stages of our turnaround, I am more optimistic than ever that Burberry’s best days are ahead and that we will deliver sustainable profitable growth over time.”
The UK has a rich fashion manufacturing heritage, but the industry stands at a crossroads — it can either adapt to the new, tariff-accelerated era of localisation and thrive, or settle for decline.
The response from analysts was mixed. James Grzinic at investment bank Jefferies rated the brand as underperforming and called the turnaround a “slow burn”. Luca Solca at asset management firm Bernstein said the results appear to be a slight beat on low expectations, and anticipates that the market will take this as a positive sign (though he stressed that the ‘new’ Burberry under Schulman has yet to come to fruition).
Thomas Chauvet at Citi rated Burberry stock as “buy” and said that “while patience is needed, potential rewards now outweigh the risks”, particularly thanks to the tight cost-saving programme. Adam Cochrane at Deutsche Bank’s recommendation was also “buy”, as he highlighted that Q4 performance was better than expected (comparable store sales were down 6 per cent in the fourth quarter — roughly in line with LVMH’s fashion division’s 5 per cent sales decline, but less than Kering’s 14 per cent sales drop).
In November 2024, Schulman unveiled his turnaround strategy, ‘Burberry Forward’, which is centred on leaning into the categories the brand has the most authority in (outerwear and scarves) while reducing prices in areas like leather goods. Within this strategy, the brand has improved its merchandising and marketing in a bid to reach back out to its core customer, who was alienated by Burberry’s overly fashion-forward approach in recent years.
When asked by analysts whether creative director Daniel Lee remains a good fit, Schulman affirmed his confidence in the designer and the teams surrounding him. “Sitting here today, about 10 months into my tenure [Schulman was appointed in July 2024], I couldn’t be happier with the progress that our team is making on the brand expression, and moving the brand expression from modern British luxury to timeless British luxury. Seeing the customer response to that, our brand metrics have all seen a significant improvement in the second half compared to the first half,” said Schulman, emphasising the improvements to marketing and merchandising.
By region, comparable store sales in Asia-Pacific dropped 16 per cent for the full year (down 9 per cent in Q4 alone). Mainland China was down 15 per cent in 2025, Japan inched up 1 per cent (boosted by tourist spend, mainly from Chinese customers), South Korea dropped 18 per cent and South Asia-Pacific declined 28 per cent.
EMEIA (Europe, the Middle East, India and Africa) dropped 8 per cent in the full year and 4 per cent in Q4. “Business in our UK home market continues to be seriously impacted by the withdrawal of VAT refunds for overseas visitors,” said CFO Kate Ferry on the call.
The Americas dropped 9 per cent in FY25 and 4 per cent in the fourth quarter. “In the festive quarter, we had a positive comp in the US, and the US customer was the first to come back [following a market slowdown],” said Schulman. “As we got into Q4, the US customer was keeping their momentum but things got a little bit choppy as we headed into February, particularly on the US market [which makes up 19 per cent of sales].” Schulman said that, anecdotally, the brand performed well during US Mother’s Day weekend this month.
Ferry said the cost-saving measures outlined today would help Burberry to weather the storm of tariffs. “We do feel, wherever tariffs end up, that we have the levers to mitigate it and we’ve announced cost savings today, which are clearly helpful,” she said. “We knew this was coming — we didn’t know the exact shape of it, but we’ve spent the last year really looking at everything across the business, whether it’s pricing or understanding our supply chain, so we’re well equipped. But [the tariff situation] is dynamic so we’ll see where we end up.”
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