After reporting a loss on Thursday, troubled British fashion brand Burberry announced efforts to reduce costs, as the global luxury market is under pressure from sluggish Chinese demand.
In the six months ending in September, Burberry recorded a net loss of US $ 94 million, which was lower than the company’s profit after tax of US $ 200.17 million during the same period the previous year.
According to a statement from the company known for its trench coats and distinctive red, camel and black check design, revenue fell 22 per cent to US $ 1.38 billion.
According to Joshua Schulman, the company’s newly appointed CEO, Burberry would revive a “high-performance culture” and concentrate on outerwear and in-store productivity. It followed rumours that Moncler, an Italian fashion brand, was interested in purchasing the 168-year-old firm.
In an effort to save some US $ 50.68 million, Burberry announced on Thursday that it has stopped paying dividends. “Over the past several years, we moved too far from our core with disappointing results,” the group stated. In July, Schulman took Jonathan Akeroyd’s place as CEO.
After 15 years, Burberry left London’s elite FTSE 100 stocks index in September, with analysts pointing to strategic errors and a lacklustre Chinese demand.
With mainland China’s store turnover falling 24 per cent in the first half of the year, Burberry experienced the biggest decline in sales in the Asia Pacific area. With half of worldwide sales, China is the largest consumer in the luxury market. However, consumption has slowed as its post-pandemic recovery falters, which has caused anxiety in the luxury market worldwide.
