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Burberry shares fell to their lowest level since 2010 after its boss resigned after just two years at the helm.
On a gloomy day for the troubled British fashion brand, it was announced that Jonathan Akeroyd would be replaced by former Michael Kors and Jimmy Choo boss Joshua Schulman, who was handed a £9.2m “golden handout”.
The FTSE 100 company also scrapped its dividend as it warned it was on track to post losses in the first half of the year.
Shares fell 16 percent, bringing the stock’s value to nearly 50 percent of what it was at the beginning of this year and 70 percent of last year’s peak.
The company, famed for its checked and trench coat designs, is now valued at just £2.6bn, after being worth £5.7bn when Akeroyd took over in March 2022.
Sacked: Burberry said Jonathan Akeroyd (pictured with supermodel Naomi Campbell) will be replaced by former Jimmy Choo boss Joshua Schulman
“Losing 70 percent of its market value in just over a year is embarrassing for Burberry, given that it is supposed to be one of the world’s brightest luxury brands,” said Dan Coatsworth, an analyst at AJ Bell.
“If the actions of the person running the company don’t produce results, he is shown the door.”
Akeroyd’s dismissal comes just days after another British luxury brand, Mulberry, fired its boss, Thierry Andretta, underlining the scale of the crisis gripping the industry.
And Burberry’s shares have fallen so low that there is growing speculation that it has become a takeover target, possibly for LVMH.
In a statement to the stock exchange yesterday, Burberry said Akeroyd had left the company “with immediate effect and by mutual agreement with the board of directors.”
Chairman Gerry Murphy said his replacement was “a proven leader” with a CV that would be “key to realising Burberry’s full potential”.
Schulman ran handbag maker Michael Kors from 2021 to 2022 and luxury shoe brand Jimmy Choo from 2007 to 2012.
He will receive a salary of up to £9.2m for taking the job, including £3.6m in shares on top of his £1.2m salary and £4.4m in potential bonuses.
Akeroyd was paid £1.1m last year but did not receive a bonus due to the club’s poor performance.
His departure was announced with a shock sales update that showed Burberry’s revenue in the first quarter of its financial year to June 29 amounted to £458m, down 21 per cent on the previous year.
One of its largest markets, China, has been particularly tough, with sales down 23 percent in the Asia Pacific region.
It warned it was heading for a loss for the first half and lower-than-expected profits for the full year if operations continued to be so poor.
Murphy insisted he was taking “decisive action” to lure back customers after a “disappointing” performance.
In addition to suspending dividend payments to shore up its balance sheet, it said it was considering job cuts and other cost savings.
Akeroyd attempted to take the brand upmarket and cut prices to clear unsold stock, but this appears to have cost it its must-have appeal.
In recent collections, creative director Daniel Lee has sought to return the brand to its roots by focusing on its signature check print and staples such as the £1,900 beige trench coat.
But Burberry’s share price collapse has sparked speculation that the company could be taken over by a rival or that private equity predators could swoop on the 168-year-old label.
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