In 2024, Burberry’s brand value fell $2 billion reveals Kantar’ annual ranking of UK’s top 75 brands. The report titled, ‘Brandz,’ reveals, the dip in Burberry’s value makes it the second-largest loser after St James’s Place. With the luxury industry hit hard by a downturn in spending as the ‘revenge shopping’ post-COVID-19 fades, even the wealthiest consumers have been feeling the effects of the cost-of-living crisis. Luxury players like LVMH are also facing challenges with Bernard Arnault, CEO, LVMH dropping from the top spot as the world’s richest person.
For Burberry, the luxury downturn coincided with internal issues as its drawn-out turnaround plan faltered, leading to the brand’s value reducing to a half in 2024. The brand sacked Jonathan Akeroyd as its CEO in July after the company issued its third profit warning of the year and suspended its dividend, causing shares to plummet. The brand also terminated hundreds of employees with a fall in its valuation leading ton investment analysts speculating about a potential takeover. In August, Burberry was removed from the FTSE 100, the benchmark for the UK's biggest stocks.
Several factors are responsible for Burberry’s current struggles, opine analysts. These include the brand’s over dependence on slower-growing apparel segments and weak performance in iconic outerwear and leather goods. The brand also made multiple changes in creative direction over the past decade. Combined with recent price hikes, these failed to resonate with aspirational consumers amid a broader slowdown in luxury spending.
However, Jelena Sokolova, Analyst, Morningstar, believes, the brand still has an opportunity to recover by renewing focus on outerwear collections and designing more affordable ranges, Other retailers such as Marks & Spencer, meanwhile, are witnessing 38 per cent boost in brand value, a result of positive shifts in consumer perception of both its grocery and fashion offerings.
