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Less than two years into the job, Burberry CEO Jonathan Akeroyd is feeling the heat. Gerry Murphy, chairman of the London-based company, is already interviewing potential candidates to replace the 57-year-old British executive, several senior industry executives said, citing head-hunters.

“Gerry is going out and talking to people about potential replacements for Jonathan,” the CEO of a British fashion brand told Miss Tweed. Three other fashion executives and two head-hunters said the same thing in the course of the past three weeks.

Burberry would not comment directly on the search. A spokesman for the company said: “In the normal course of business we would look at succession planning for board roles as they reach term. Jonathan enjoys the full backing of the board.” A source close to Burberry said no official mandate had yet been given to a head-hunting firm.

However, that does not preclude Burberry’s chairman from having informal discussions with potential candidates recommended by head-hunting firms, the fashion executives said. “It’s happening a bit too soon in my view, but I’m afraid the board is already thinking of hiring a new CEO for the company,” the head of one major European fashion company told Miss Tweed on condition of anonymity.

Murphy is catering to investors’ frustration about Burberry’s turnaround, the executives said. Patience is running out. The brand has been a constant work in progress for too many years. But if Murphy and the majority of Burberry’s board members had any experience in fashion and luxury, they would know that it takes time to revamp a brand. It does not happen overnight. And Burberry is a big ship to turn around.

Burberry’s 68-year-old chairman may want to find a replacement for Akeroyd but maybe it’s him who needs to go, along with the majority of Burberry’s board who know and understand little about fashion and luxury, industry sources suggest.

Before joining Burberry in 2018, Murphy worked for the private equity group Blackstone. He was also CEO of DIY group Kingfisher, Carlton Communications, logistics company Exel and Greencore Group, a ready-to-eat food manufacturer. In September 2023, Murphy became chairman of the supermarket group Tesco and resigned as chairman of Tate & Lyle, an international food company. Since he joined Burberry, Murphy has always been doing other things than just focusing on building the British brand.

Of Burberry’s 12-strong board of directors, there are only two people with backgrounds in fashion: Ron Frasch, who ran Saks Fifth Avenue and before that Bergdorf Goodman, and Alessandra Cozzani, who joined in September 2023 from Prada where she spent 20 years and was group chief financial officer. All the others have experience in other areas from women’s rights to corporate governance to finance.

Maybe it’s time the company hired board members with real experience in fashion and luxury and helped it on building the brand’s desirability – instead of topics like the environment, sustainability and inclusivity. Luxury is about selling a good story to customers, about selling them a dream – not about saving the planet or empowering women. That comes after. If the company’s board had any knowledge of the industry, they would put less pressure on Akeroyd, who ran Versace and McQueen for many years before he joined Burberry.

“Burberry is a big company with an old-fashioned board full of PLC types who are stuck in their ways. It’s not easy to change anything there,” one London-based fashion retailer said. If Burberry was taken private and got rid of its crowded board of directors and of bad habits like outlets, it could become the luxury giant the country deserves, industry experts say.

PROMISES

The market’s scrutiny and constant demands for revenue and profit increases make it impossible for Burberry to stop selling shiploads of products at a discount to artificially boost sales. Being private would also allow it to focus on strengthening its UK-based supply chain – as being vertically integrated is the name of the game in luxury today - and building brand equity.

For six years now it’s been promises, promises and little delivery. Annual revenue has been stagnating while that of many industry peers has soared. In the year to April 1, 2023, Burberry’s annual revenue reached £3.094 billion, up from £2.73 billion in the year to March 30, 2019. Comparatively, brands like Dior, Loewe, Prada, Chanel and Loro Piana recorded double-digit increases in the post-pandemic years of 2021 and 2022. In October, LVMH said Dior’s size had been multiplied by three in the past seven years, hinting that such growth could not go on forever.

In January, Burberry issued a profit warning and reported a 7 percent drop in sales in the 13 weeks to Dec. 30 which it blamed on tough market conditions. Meanwhile, bigger rivals such as Dior, Louis Vuitton and Prada posted growth of 9-10 percent for the quarter to Dec. 31.

Some investors are losing faith in Burberry’s brand elevation strategy and medium-term target of £4 billion revenue. The company’s share price has more than halved since its all-time peak of 2,656 pence in April 2023. The stock closed on Friday at 1,258 pence.

CHECKERED HISTORY

Between 2018 and 2022, Burberry was led by two Italians, CEO Marco Gobbetti and designer Riccardo Tisci – a duo that did not produce great results. Gobbetti focused on topics such as sustainability instead of brand positioning and storytelling. Meanwhile, Tisci turned Burberry into an urban, gender-fluid sporty brand and disconnected it from its British roots and timeless elegance heritage. As a result, even Britons lost interest in the brand.

Gobbetti left without finishing the job and now it looks like Akeroyd is not going to be given enough time to finish his either. Burberry’s chairman is becoming as impatient as shareholders. If Murphy was a seasoned fashion executive and the company was controlled by an entity or a family that had long-term investment horizons, he would not care about what investors think and invest in the brand so that 10 or 20 years from now, it would be more desirable than it is today. One of Burberry’s main problems is that it is 100-percent owned by institutional investors who focus on the short term. Luxury is a long-term game. LVMH CEO Bernard Arnault knows this too well. And that’s part of the reason why LVMH is the best in class in the industry and the No.1 group in terms of market capitalization.

HIGH HOPES

In 2022, Gobbetti resigned from Burberry after being offered a lucrative package to run Italy’s Ferragamo, a brand that published dire results again this week for reasons Miss Tweed explained in October. A few months after he joined Burberry, Akeroyd appointed designer Daniel Lee. Lee had successfully revamped Bottega Veneta and introduced hugely popular products such as the bright green Pouch bag and Lido mules. He also did brash things such as closing down Bottega Veneta’s social media accounts in 2021 – months before he was sacked from the brand for outrageous behavior.

The plan was for Lee to give Burberry new momentum by turning it into a cool brand even Britons would want to wear. But somehow Lee’s magic has not worked yet. His products started hitting the stores last September, 11 months after his arrival, but buyers say they’ve not been selling like hot cakes.

“Lee’s arrival has not really created much traction in terms of sales,” one London-based online wholesaler told Miss Tweed.

Lee’s runway show last fall and advertising campaign shot on the rocky Isle of Skye in Scotland were well received by the press. The collection presented during London Fashion Week in February also got positive reviews, with buyers and journalists praising his chocolate brown and beige looks. Buyers say Lee clarified the brand’s message. He also brought back the equestrian knight – first introduced in the early 20th century – and tinted it in bright blue. It’s now everywhere, from boutiques to ad campaigns. Color is definitely one of Lee’s strengths. But his eye for the right hue and his overall creativity have somehow not been enough to create buzz and stimulate demand, particularly for Burberry’s handbags, on which the company pinned high hopes since that’s where the fat is in fashion.

Burberry is mainly known for its beige, black and red check and its £2,000 trench coats. Its biggest business is in countries such as China and South Korea, where consumers snap up its scarves, trenches and shirts featuring its famous tartan at discount prices. That’s one of Burberry’s biggest problems. Burberry derives a significant proportion of revenue from outlets not only in Asia but also in North America and Europe.

When shoppers see Burberry’s products marked 40 percent or 60 percent off, they cannot believe it’s a luxury brand. The company routinely refuses to divulge what percentage of revenue comes from outlets. Some analysts say it is as much as 30 percent. Also, shooting itself in the foot, Burberry had to get rid of Tisci’s past collections, selling them at big discounts, a move that further eroded the brand’s perceived exclusivity.

STRATEGY

Lee’s marketing and designs may be strong, but there have been some execution and strategy issues. For starters, Burberry released last fall a new collection of bags priced at £2,500 – or £1,000 more than what its bags usually cost. The timing was unfortunate. Consumers in the past year have been focusing on value for money and have been reluctant to splurge on brands without the cachet of a Chanel, a Dior or a Loewe. “When you sell £2,000 raincoats, other products should be less expensive, not more expensive,” explained the managing director of one big French leather goods maker based in Paris. “For example, if I buy an expensive suit at a menswear brand, the shoes should not be as expensive, otherwise why buy them from this brand? I get better value for money from more legitimate Italian or French shoe brands. Slapping a high price on a product does not mean it’s luxury. Consumers are not stupid. Burberry should not behave like it’s Chanel because it’s not.”

Of course, it takes time to get products to markets – particularly for Burberry, whose supply chain is spread out around the world. Still, the company could have foreseen consumer trends 18 months ago, when interest rates started to rise and consumers were tightening their purse strings.

“Burberry has not figured out yet how to build a strong story around its handbags,” one Paris wholesaler told Miss Tweed this week. Yet, Lee’s new collection of bags carry names that fit its identity and heritage: the Chess, the Knight and the Shield. But their shapes are not particularly compelling, fashion critics say.

Also, you can’t find them easily on the brand’s website. They don’t jump at you when you log on to the home page. Nor do you see much of Lee’s videos and ad campaigns. The website – which is a brand’s main shop window – is difficult to navigate and you quickly end up with endless lists of products. There is little quality editorial content on it.

SENSE OF HUMOR

Some critics would like to see Burberry leverage one of Britain’s main cultural assets: its sense of humor. There isn’t much lightness and humor in Lee’s world. You find it more with brands such as America’s Thom Browne (part of Zegna Group), France’s Hermès and Britain’s Paul Smith.

Other experts complain about the fact that Burberry does not dominate the menswear category in Britain. It should be the go-to place for City types to get a nice suit, shirt or jacket. Instead, they go to Italian brands such as Zegna, Loro Piana or Brunello Cucinelli. It’s a shame considering Britain’s heritage in tailoring, with London’s famous Savile Row and prestigious brands such as Gieves & Hawkes, now in the hands of Frasers Group. Britain is where dandyism was born. Burberry used to be the reference for coats. Back in 1965, one in five coats exported from Britain was a Burberry product – the brand says so on its website.

In the UK, Burberry has not managed to woo women with fashionable designs and it has put off ordinary men with overly edgy clothes. “Burberry should be the ultimate reference in menswear but it’s not,” one London wholesaler said. Perhaps it should split its design team. Keep Daniel Lee for women and appoint a designer for menswear who can look after those millions of men who just want to look elegant without too many fashion bells and whistles. Dunhill may hold the record in Britain in terms of accumulated losses but it’s doing a much better job catering to those men who just want to look elegant and refined.