‘Our best days are ahead’: Burberry CEO reveals turnaround plan

His new strategy brings pricing back in line with what it used to be: handbag prices will sit among the £1,500 to £2,000 range rather than over £2,000, instead stretching pricing and elevation across the categories where the brand has more authority — namely, outerwear and scarves.

Aside from the pricing strategy, Schulman highlighted that outerwear and scarves will be pushed to the most prominent positions within stores. No more scarves hidden in drawers and left out of marketing campaigns; instead, Burberry has introduced a ‘Scarf Bar’ at its New York flagship and plans to roll that out to other locations, alongside its new campaign (“It’s always Burberry weather”) featuring scarves-a-plenty.

Schulman describes the pricing architecture as “good, better, best”, which indicates the lowest, middle and highest prices. In outerwear, “best” pricing will represent around 20 per cent, while “better” and “good” will represent around 40 per cent each. In the other categories — ready-to-wear, bags and shoes — “best” will represent just 5 to 15 per cent.

In terms of discounting, Burberry is currently dealing with a “significant inventory overhang”, according to Schulman, so it plans to use outlets to clear excess stock. After that, it will tighten up its buy and inventory, then roll back on outlet exposure to drive margins up.

Speaking to the core customer

Schulman identified five customer archetypes: the opinionated customer, who is fashion-forward; the investor, who is high spending and invests in quality products; the conservative, who spends a little less than the investor but also seeks quality; the hedonist, who appreciates the brand and seeks self-expression; and the aspirational customer, who is lower spending and often wants branded products.

The problem in recent years has been that the opinionated fashion-forward customer has been the only focus, while others have been pushed to the sidelines. “We prioritised inventory and marketing investments around seasonal fashion moments at the expense of our core categories, resulting in diminished visibility of our core outerwear, and we took pricing too high across the board, particularly on leather goods where we lacked natural category authority,” said Schulman. “These changes were designed to appeal to a fashion-forward customer, and although this audience can be very influential, the narrowness of our target confuses a large and important cross section of our core customers.”