Burberry Shifts Focus to Scarves and Outerwear Amid Losses

British luxury fashion house Burberry has rolled out a new strategy emphasising scarves and it's signature outerwear, like trench coats, as it tackles a significant quarterly loss. Interestingly, the announcement propelled Burberry shares to climb up to 17% during London's trading hours, though the company's stock remains 40% lower this year. Like the rest of the luxury industry, Burberry has been struggling with a decline in demand from Chinese consumers, prompted by a lengthy downturn in real estate. Burberry and similar brands have enjoyed a surge due to Chinese consumers' increasing taste for luxury goods over the past years. Over the recent years, Burberry had diversified its product line to incorporate areas like handbags and other accessories. However, their initiative to go upmarket and elevate their prices did not win consumer's favor. Recently posted CEO Joshua Schulman, a former executive at Michael Kors and Coach, expressed his views that Burberry's endeavor to extend beyond its signature outerwear resulted in the brand's current predicaments. Schulman stated, "Today, we are acting with urgency to course correct, stabilize the business and position Burberry for a return to sustainable, profitable growth". Despite the strategic overhaul, Burberry reported a loss of GB£53 million ($67.07 million) in the first half from a profit of GB£223 million for the same period last year. Moreover, revenue for the six months to Sept. 28 descended 22% year-over-year to GB£1.09 billion, representing a 20% fall on a constant-currency basis. The company's share remains down by 40% this year despite the recent surge.