Burberry shares were sharply higher on Wednesday after the luxury brand revealed the initial success of its ‘Burberry Forward’ strategic plan, designed to improve retail sales.
Following a difficult start to the year, Burberry has begun to turn things around after launching its strategic plan, with the pace of sales declines slowing to 5% in H2 compared to a 20% decline in H1.
Burberry has taken decisive steps to rebalance its product offering with a “fewer, bigger ideas” strategy and aligned pricing with luxury market expectations. In-store visual merchandising has been enhanced, while digital styling updates have delivered improved online performance.
Burberry is going back to basics to revive sales. The brand was built on the famous check pattern that hasn’t featured as heavily in recent lines, and analysts have highlighted the group’s efforts to refocus on design synonymous with the brand’s legacy.
“Burberry is refocusing on heritage staples like its iconic trench and checked coats, moving away from short-lived fashion trends. This reinforces its brand identity, appeals to loyal and traditional customers, and may help cushion against downturns in the luxury market,” said Yanmei Tang, Analyst at Third Bridge.
“However, challenges remain. Our experts note that in categories like leather goods and footwear, Burberry struggles to compete with more established luxury players such as Louis Vuitton and Hermès.”
There are also challenges from the macro environment, which has been far from favourable for luxury brands.
That said, Burberry said they were confident they were ‘positioning the business for a return to sustainable, profitable growth’.
The market liked their optimism and the progress in their turnaround plan to date. Burberry shares jumped over 9% in early trade.