Burberry has replaced boss Jonathan Akeroyd after just over two years in the job as the luxury fashion firm said it is set to slump to a loss and halted shareholder dividend payouts.
The group said Mr Akeroyd is leaving with immediate effect “by mutual agreement with the board”.
He will be replaced as chief executive by former Michael Kors boss Joshua Schulman, who takes on the role from July 17.
Burberry made the unexpected announcement as it warned it will record a first-half operating loss if retail sales continue to fall at the current pace, having plunged by 21% on a same-store basis in its first quarter to June 29.
It said full-year earnings will also be lower than expected, and suspended its dividend, sending shares down more than 11% soon after market opening on Monday.
Chairman Gerry Murphy said it is a “disappointing” performance but insisted the group is taking “decisive action” to turn round flagging sales.
He said: “Our first-quarter performance is disappointing.
“We moved quickly with our creative transition in a luxury market that is proving more challenging than expected.
“The weakness we highlighted coming into 2024-25 has deepened and, if the current trend persists through our second quarter, we expect to report an operating loss for our first half.”
He added: “We are taking decisive action to rebalance our offer to be more familiar to Burberry’s core customers whilst delivering relevant newness.
“We expect the actions we are taking, including cost savings, to start to deliver an improvement in our second half.”
Former Gianni Versace boss Mr Akeroyd took on the top job at Burberry in April 2022 with a so-called “golden hello” worth around £6 million and was tasked with returning sales to pre-pandemic levels.
But his tenure has been hampered by a raft of high-level departures and a rout in the luxury retail sector amid a global cost-of-living crunch.
Soon after he joined, its well-respected chief financial and operating officer, Julie Brown, said she was leaving after six years, while its creative director of nearly five years, Riccardo Tisci, also announced he was quitting.
Mr Tisci was replaced by former Bottega Veneta creative director Daniel Lee, while Kate Ferry became chief operating officer last year.
Mr Murphy said incoming boss Mr Schulman is a “proven leader” whose experience will be key to “realising Burberry’s full potential”.
As well as being the boss of Michael Kors from 2021 to 2022, Mr Schulman was also formerly brand president at Coach, while past roles include heading up Jimmy Choo in London.
He takes on the role with a “recruitment share award” worth £3.6 million, which will vest after three years based on performance targets, plus relocation costs to cover his move from New York to Burberry’s London headquarters.
In the role, he will be paid a £1.2 million salary and will be entitled to a potential maximum annual bonus worth £2.4 million, plus possible long-term performance share awards worth £1.95 million.
Mr Schulman said: “Burberry is an extraordinary luxury brand, quintessentially British, equal parts heritage and innovation.
“Its original purpose to protect people from the weather is more relevant than ever.
“I look forward to working alongside Daniel Lee and the talented teams to drive global growth, delight our customers, and write the next chapter of the Burberry story.”
Mr Akeroyd will not be eligible for a bonus for the current financial year and all unvested share awards will lapse in full, according to Burberry.