The executive change comes as Burberry struggles against challenging economic headwinds in the luxury sector.
In May, the U.K.-based house posted a 4% preliminary revenue drop for fiscal 2024 and a 34% drop in adjusted operating profits. Those numbers followed the company’s early profit warning, posted in January, and an 18% profit dip for H1, posted in November.
“While the entire luxury market is soft, Burberry has been on a particularly painful losing streak,” Neil Saunders, managing director of GlobalData, said in emailed comments. “It is one of the few brands, along with Gucci, that has lost market share in luxury fashion compared to the pre-pandemic period.”
Burberry has tried to move itself upmarket into a more exclusive position, Saunders said, but the company “still relies heavily on mid-priced sales and discounting to drive volume, which is incompatible with the aspiration to move into a higher-priced space.”
“There is also a sense that management has been disconnected from the realities of consumer sentiment about the brand and its true position within the market,” Saunders said. “It is all very well having a new brand vision: but you need to take consumers with you on that journey.”
Saunders called Shulman’s appointment “interesting.”
“In our view, Schulman has an extremely firm grip on market realities and an intimate understanding of the luxury space,” Saunders said. “He also has experience in repositioning brands — such as Coach where, despite some painful moments, he delivered a successful turnaround.”
Shulman, who also held a board position at luxury brand Zimmermann, will be relocating from New York to London, and will lead Burberry’s executive committee, per the release. He reports to Burberry Chair Gerry Murphy and the board of directors.
“Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation,” Shulman said in the release. “Its original purpose to protect people from the weather is more relevant than ever. I look forward to working alongside [Burberry creative director] Daniel Lee and the talented teams to drive global growth, delight our customers, and write the next chapter of the Burberry story.”
Saunders said that “for the most part, Schulman’s playbook has been about accessible luxury” and finding “that fine middle-ground of avoiding ubiquity and cheapness while still allowing a broad base of consumers to buy into a brand.”
“This is a strategy he is likely to use at Burberry and it marks a welcome step change from the unrealistic push to a more rarified and uber-luxury brand position,” Saunders said.
In welcoming Shulman to the brand, Murphy said in the release that the incoming CEO was “a proven leader with an outstanding record of building global luxury brands and driving profitable growth.”
“He has a strong understanding of our brand and shares our ambition to build on Burberry’s unique creative heritage,” Murphy said. “His extensive experience in luxury and fashion will be key to realising Burberry’s full potential.”
Murphy also thanked Akeroyd “for the contribution he has made to Burberry,” and said Akeroyd “has set out a clear strategy for growth that we will build on.”
