Shares in the luxury brand plunged by 11% as it announced it has replaced its chief executive and suspended its dividend after warning that annual profits will fall short of expectations.
The company, which is best known for its trenchcoats, said Joshua Schulman, the former boss of US brand Michael Kors, will take over as chief executive.
Schulman replaces Jonathan Akeroyd, who is leaving Burberry "with immediate effect by mutual agreement with the board", the company said.
The announcement came as Burberry released a trading update for the three months to the end of June, warning that the market was “proving more challenging than expected”.
The fashion brand said it was suspending its dividend, given it was on course to post an operating loss for the first half of its financial year.
Read more: LIVE: FTSE 100 and European markets down as Burberry reports profit hit
The luxury retailer revealed a 21% slump in comparable store sales in its first quarter trading update, leaving revenues down 22% to £458m ($594.9m).
Richard Hunter, head of markets at Interactive Investor, said: “If the current levels of trading persist, the group could slip to an operating loss in the first half of the year, which will add to what has been a significantly difficult time for the company.
“The level of the group’s appeal has been thwarted by weakening consumer demand, especially in the likes of China, with sales in the Asia Pacific region declining by 23% in the first quarter. Even prior to a dip of up to 12% in the share price at the open as investors attempted to digest the news, the shares had fallen by 58% over the last year and today’s announcement will have a seismic impact on the group’s nearer term fortunes.”
Burberry Group plc (BRBY.L)View quote details LSE - Delayed Quote (GBp) 667.80-8.00(-1.18%) At close:5:08PM BST
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