British luxury group Burberry named former Michael Kors boss Joshua Schulman as its new chief executive on Monday, as it warned on profit and scrapped its dividend payment for this year.

A slow down in the luxury sector has hit Burberry hard over the last year, derailing the 168 year-old British brand as it tried to move upmarket.

The company said weakness in its market had deepened, pushing underlying sales down 21% in the 13 weeks to June 29, and as such it would switch back its offer to be “more familiar” to its “core customers”.

That decline prompted the board to say CEO Jonathan Akeroyd would leave with immediate effect by mutual agreement on Monday, just over two years after he took over. 

Schulman, his replacement, has headed American fashion brands Michael Kors and Coach, Burberry said in a statement also describing him as “a proven leader with an outstanding record of building global luxury brands and driving profitable growth.”

Burberry’s chairman Gerry Murphy said the British luxury brand was sticking with designer Daniel Lee after the group on Monday named Joshua Schulman as its new chief executive to lead a turnaround.
“Daniel is not going anywhere. He is looking forward to working with Josh,” Murphy told reporters on Monday.

Burberry, Britain’s biggest luxury brand which made its name dressing the English upper classes, said if current trends continue its full-year operating profit would come in below consensus.

The company wants to cut costs and its chief financial officer said that she could not comment on future job losses, as a consultation process was ongoing, but that a few hundred roles could be affected, mostly in UK corporate

The move to refocus back on its classic camel, red and black check print after a flirtation with bold colours would start to deliver an improvement in its second half, the company said. 

FNW with Reuters