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Stewardship principles
Governance fit for purpose
Continuously held since: 2011
Holding as at end 2025: 1.69 percent
Burberry is one of the UK's best-known luxury brands, famous for its classic outerwear and iconic British identity. Baillie Gifford has been a significant shareholder since 2011. Over the last decade, we have supported Burberry's strategy to elevate its brand by aligning its distribution and product range with a luxury positioning, underpinning long-term sustainable growth and value creation.
Continuously held since: 2011
Holding as at end 2025: 1.69 percent
| Engagement type | First engaged on the topic |
|---|
| Assessing | 2024 |
To understand the reasons for management change and implications for Burberry's strategy
Status
Ongoing
In recent years, Burberry has set out its strategy to reposition itself at the higher end of the luxury market. Its focus has been on ‘premiumisation’, making the brand feel more high-end by moving into higher-margin products such as leather goods and doubling down on its British identity. However, in mid-2024, amid a very challenging demand backdrop for the luxury goods industry, Burberry issued its fourth consecutive profit warning and suspended its dividend. Shortly after, the CEO was replaced without warning. This sudden change prompted us to question whether the company was about to change direction and whether it remained on track to deliver its long-term premiumisation plan.
Following several profit warnings and a sudden CEO departure, we engaged with members of the board to gain further insight into what was happening at the company, assess the impact on board effectiveness and ensure its premiumisation strategy remained on track.
Management and the board are vital to the successful execution of the company’s premiumisation strategy and, ultimately, the value generated for shareholders. A sudden change in leadership risks derailing this, which could be detrimental to our investment case.
Our confidence in Burberry's strategic direction and the conviction in our investment case remain intact. We will seek to engage with the incoming chair once they are confirmed to build our understanding of board dynamics.