Analysis-Fewer shoppers in Burberry stores complicates design overhaul
By Mimosa Spencer
PARIS (Reuters) — The slowdown in the luxury market following a post-pandemic boom could not come at a worse time for Burberry, with designer Daniel Lee's first styles for the British label trickling into newly refurbished stores.
Executives cautioned on Thursday that they would struggle to meet Burberry's annual revenue forecast, pointing to a darkening macro economic climate across the globe and capping off a tumultuous reporting season for the sector.
Shoppers in the United States and Europe have grown cautious about splashing out on high-end purchases as the cost of living rises, while appetite in China has been deflated by a property crisis and record youth unemployment.
Burberry is in a «particularly difficult position», compared to peers, said analysts at JPMorgan, citing the difficulty of shifting the label's image upmarket when shoppers might be pickier about what they buy.
With fewer shoppers heading to Burberry stores, clinching a sale will be key. «The challenge here is conversion», said Chief Executive Jonathan Akeroyd in a call with analysts, adding that the brand would have to work particularly hard on increasing the number of shoppers who make a purchase as the industry grapples with lower footfall.
«That's really what we're focusing on,» said Akeroyd.
For Burberry, the challenge has steepened.
The company is undergoing an aesthetic overhaul aimed at stoking interest in the brand with better quality, higher priced products, such as the 2,890 pound ($3,582) medium-sized «Knight» bag.
It has been refurbishing stores at breakneck speed, opening more than one a week or 33 in the first half of the year in places like Los Angeles, Dallas, Houston, Omotesando in Tokyo and Bond Street in
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