Burberry’s new chief executive, Joshua Schulman, has announced a major strategic shift, effectively ending the British fashion house’s decade-long effort to break into the ultra-luxury market. Since taking the helm in July, Schulman has made clear his intention to refocus the brand on its heritage, signaling a retreat from the risky expansion into niche designer products and pricey handbags that failed to resonate with customers.

In a blunt message to investors and analysts, Schulman admitted, “The juice wasn’t worth the squeeze on that,” referring to the costly experiments away from Burberry’s iconic trench coats and classic designs. The company’s attempt to elevate itself to the same level as global luxury giants simply did not pay off.

Sales Hit a Historic Low: The Price of Experimentation

Burberry is facing its worst sales slump since 2014, with revenues and profits falling amid a global cooling in luxury goods demand. Contributing factors include lingering pandemic-related disruptions, trade tensions—especially in the U.S.—and a simultaneous slowdown in Asia Pacific, a key market generating nearly half of Burberry’s sales.

Despite a brief post-pandemic stock rally in 2023, Burberry’s shares have plummeted over 60% from their peak, leading to the company’s removal from the FTSE 100 index last year. Investors remain cautious as uncertainties around U.S. tariffs and uneven market recovery in both America and China persist.

A Sweeping Restructuring: Slashing Jobs and Costs

Central to Schulman’s turnaround plan is a drastic reduction in workforce. Up to 1,700 positions, roughly 20% of Burberry’s employees, will be cut, mostly affecting office-based roles at headquarters near London’s Big Ben. Even Burberry’s traditional manufacturing hub in Castleford, northern England, will see significant cuts, including the elimination of night shifts which threatens about 170 jobs—around a third of the factory’s workforce.

These measures aim to reduce overproduction and generate an additional £60 million in savings over the next two years, supplementing an already planned £40 million cost reduction. Schulman’s approach clearly echoes his previous leadership roles at Coach and Michael Kors, where streamlining operations helped restore profitability.

Back to Basics: Heritage and Outerwear

Schulman plans to re-anchor Burberry’s identity firmly in its heritage, doubling down on outerwear staples such as trench coats, scarves, and even expanding into unexpected categories like bikinis. Classic Burberry check trims on polo shirts and dresses will be featured prominently to appeal to year-round consumers.

This strategic pivot is a marked departure from the company’s recent “runway brand” experiments, which Schulman describes as “unfamiliar and did not resonate” with customers. By embracing its roots, Burberry hopes to rebuild brand loyalty and regain steady sales growth.

Market Reactions: Cautious Optimism Amid Uncertainty

Burberry’s shares rose 17% following Schulman’s announcement, reflecting investor approval of the decisive plan to stabilize the company. Portfolio manager Cole Smead praised Schulman’s leadership, saying, “We think we are being given a unique brand on the cheap,” signaling confidence in the brand’s potential turnaround.

However, the company remains cautious about ongoing trade tariff impacts, especially in the U.S., and the unusual simultaneous struggles in its two largest markets—America and China. Schulman noted the rarity of both regions facing downturns together, historically acting as hedges for each other’s markets.

The restructuring, while painful for employees and communities—especially in Castleford, a former coal-mining town—reflects a hard but pragmatic response to a decade of challenges. Burberry has cycled through multiple CEOs, creative directors, and brand directions, often failing to find a stable footing in the luxury world.

Union representatives expressed a willingness to cooperate but also underscored the economic difficulties in the region, highlighting the human impact of the cuts.

As Schulman steers Burberry back to its heritage and slims down operations, investors are watching closely, betting on the CEO’s experience and judgment to restore the brand’s prestige and profitability.

Only time will tell if Burberry’s return to its roots will revive its fortunes or mark a cautious retreat from the global luxury ambitions of the past decade.