Looks Like Daniel Lee's Revamp of Burberry Isn't Going Well

The luxury spending slowdown has been a mixed bag for fashion brands. Some, like Prada, have weathered the storm just fine; Kering's outlook for 2024 was less sunny — now, Burberry's reporting that it, too, is feeling the hit.

On Wednesday, Burberry Group PLC published its preliminary results for the fiscal year ending on March 30, 2024, which covered Daniel Lee's first few collections for the British fashion house. (The designer made his debut for Fall 2023. That product arrived in stores in September.) It revealed that reported revenue was down 4%, to £2.97 billion, and that its adjusted operating profit decreased 34%, to £418 million, with particularly tough times in the Asia-Pacific and U.S. markets.

In a statement, CEO Jonathan Akeroyd admitted that "executing our plan against a backdrop of slowing luxury demand has been challenging."

"While our FY24 financial results underperformed our original expectations, we have made good progress refocusing our brand image, evolving our product and strengthening distribution while delivering operational improvements," he said. "We are using what we have learned over the past year to finetune our approach, while adapting to the external environment. We remain confident in our strategy to realise Burberry's potential as the Modern British Luxury brand and in our ability to successfully navigate this period."

Akeroyd joined Burberry in the spring of 2022 from Versace, where he oversaw its sale to Michael Kors (which would then become Capri Holdings). Before that, he was at Alexander McQueen for over a decade. Lee came on that September, with the executive hoping he'd help boost the accessories business and flesh out its ready-to-wear offering in order to double revenue in the long term.

With the star designer now in the job for more than a year, it seems like that goal is off to a slow start.

Looking ahead, Burberry said it's doubling down on the storytelling around its products, as well as further fine-tuning its offering, retail experience and approach to wholesale. In its outlook, the company wrote that the first half of Fiscal Year 2025 will "remain challenging," with wholesale revenue expected to go down "by around -25% as we increase control of distribution," but that it's hopeful about the rest of the year. "We expect to see the benefit of the actions we are taking from H2," the report reads. "We have identified cost savings to enable us to offset the impact of inflation in the second half. Based on foreign exchange rates effective as of 25 April 2024, we now expect a currency headwind of c.£30m to revenue and c.£20m to adjusted operating profit in FY25."

Never miss the latest fashion industry news. Sign up for the Fashionista daily newsletter.