Burberry’s Strategic Turnaround and Re-Entry into the FTSE 100: A Bullish Case for the “British Coach” Strategy

Burberry’s recent strategic pivot under CEO Josh Schulman has ignited a cautious but growing optimism among investors and analysts. The “British Coach” strategy—emphasizing heritage, operational discipline, and accessible luxury—has begun to stabilize the brand’s financial and cultural footing. While challenges remain, the early results suggest that Schulman’s approach could position Burberry for a successful re-entry into the FTSE 100.

Refocusing on Core Identity: Heritage as a Competitive Edge

Schulman’s strategy has centered on reasserting Burberry’s British roots, a move that aligns with global consumer trends favoring authenticity over overpriced novelty. By spotlighting iconic products like trench coats and scarves—rather than the inflated leather goods that previously underperformed—the brand has recalibrated its value proposition. Campaigns such as “Highgrove,” inspired by King Charles’s estate, and “London in Love” have resonated with both heritage-conscious and younger demographics [1]. This repositioning has paid dividends: Burberry’s global reputation rose to 37th on RepTrak’s 2025 list, surpassing peers like Chanel [2].

Financial Pruning and Operational Efficiency

The “Burberry Forward” strategy includes aggressive cost-cutting measures, including a 20% global workforce reduction and £40 million in annual savings [3]. These steps, while painful, have begun to stabilize the bottom line. For instance, Q1 2026 saw a 2% decline in constant currency comparable sales—a stark improvement from the 21% drop in the prior year’s quarter [4]. Schulman’s emphasis on inventory management and pricing discipline has also helped curb overstock issues that plagued the brand in recent years [1].

Regional Resilience and Investor Confidence

Despite a £66 million pre-tax loss in the 2024/25 fiscal year, regional performance highlights pockets of strength. The Americas and EMEIA regions grew by 4% and 1%, respectively, in Q1 2026, while Greater China’s 5% decline reflects broader macroeconomic headwinds [2]. Crucially, Burberry’s share price has surged 70% since mid-2024, signaling investor confidence in Schulman’s long-term vision [4]. Analysts note that the brand’s aspirational goal of £3 billion in sales with a high-teens operating margin is achievable if the current trajectory continues [3].

Risks and the Road Ahead

The path to FTSE 100 re-entry is not without risks. Burberry’s operating loss in H1 2025 (£53 million) and the 20% revenue decline underscore the magnitude of the turnaround challenge [1]. Moreover, the brand’s reliance on British heritage could face scrutiny in markets where cultural relevance is less pronounced. However, Schulman’s track record at Coach and Michael Kors—where he revitalized stagnant brands—lends credibility to his playbook.

Conclusion: A Calculated Bull Case

While the “British Coach” strategy is still in its early stages, the combination of brand repositioning, operational rigor, and regional diversification justifies a cautiously bullish outlook. The 70% share price rebound and narrowing sales declines suggest that Schulman’s reforms are gaining traction. For investors, the key question is whether Burberry can sustain this momentum as it navigates global economic volatility and evolving consumer preferences. If the brand continues to execute its heritage-driven, cost-conscious strategy, its re-entry into the FTSE 100 may not only be inevitable but also a catalyst for renewed growth.

Source:
[1] Burberry’s Reputation Hits Historic High, Signaling A Turnaround [https://www.forbes.com/sites/pamdanziger/2025/05/29/burberrys-reputation-hits-historic-high-signaling-a-turnaround-and-rising-sales-ahead/]
[2] Burberry Cuts Jobs as Full-Year Profit Swings to Loss | BoF [https://www.businessoffashion.com/news/luxury/burberry-full-year-profit-swings-to-loss-but-beats-estimates/]
[3] How Burberry's New CEO Is Going Back to Basics [https://businesschief.com/articles/how-burberrys-new-ceo-is-going-back-to-basics]
[4] Burberry Q1 2026 results [https://theimpression.com/burberry-eases-declines-as-schulmans-strategy-gains-ground/]