Burberry has ousted its chief executive Jonathan Akeroyd after just over two years and axed dividend payouts following a sales slump at the UK luxury brand.
Akeroyd will be replaced as CEO by industry veteran Joshua Schulman, who takes on the top job from 17 July.
Burberry made the unexpected announcement to the stock exchange on Monday morning as the company warned it will record a first-half operating loss if retail sales continue to fall, having slumped by more than a fifth during its first quarter to 29 June.
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Former Gianni Versace boss Akeroyd took on the top job at Burberry in April 2022 with a so-called "golden hello" worth around £6 million. However, his tenure was hampered by a raft of high-level departures from the firm.
The company’s share price collapsed by more than 17% during the first three hours of trading on Monday as a result of the announcement.
Burberry said the “weakness” it had previously highlighted coming into its financial year “has deepened and if the current trend persists through our Q2, we expect to report an operating loss for our first half”.
Dividend payments suspended
Gerry Murphy, chair of the company, says: “In light of current trading, we have decided to suspend dividend payments. We are taking decisive action to rebalance our offer to be more familiar to Burberry's core customers whilst delivering relevant newness.
"We expect the actions we are taking, including cost savings, to start to deliver an improvement in our second half and to strengthen our competitive position and underpin long-term growth."
On the appointment of Schulman, Murphy adds: "I am pleased that Josh will be joining Burberry as our new chief executive officer. Josh is 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. His extensive experience in luxury and fashion will be key to realising Burberry's full potential."
In the role, Schulman will be paid a £1.2 million salary and will be entitled to a potential maximum annual bonus worth £2.4 million.
Schulman was previously CEO of American fashion brands Michael Kors and Coach, where he also served as brand president. From 2007 to 2012, he was CEO of Jimmy Choo in London.
Schulman says: "Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation. Its original purpose to protect people from the weather is more relevant than ever.”
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