Burberry went back to the trench coat, one rung down the ladder

Burberry’s difficulties became visible over 2023 and 2024. Demand for luxury cooled after the post-pandemic boom, especially in China, and Burberry was hit harder than most of its peers. Sales fell, profits fell faster, and in the first half of its 2024-25 financial year revenue dropped by around a fifth and the company reported an operating loss. In July 2024 it suspended its dividend and replaced its chief executive, Jonathan Akeroyd, with Joshua Schulman, formerly at the head of Coach. In September 2024 its market value had shrunk enough for the shares to leave the FTSE 100, the index of London’s largest listed companies.

In November 2024 Schulman presented a plan called Burberry Forward. The company said its brand execution had been inconsistent and that it had lost focus on its core outerwear category. The plan put the trench coat and the scarf back at the centre, realigned prices in categories such as leather goods, and returned to what it called timeless British luxury, with a cost-cutting programme alongside. In September 2025 the shares re-entered the FTSE 100 after a year away. The recovery is still under way, and the figures may look different by the time you read this.

Where the values were stored

Strong brands draw their core values from assets they own, and Burberry’s are unusually easy to point at. There is gabardine, the weatherproof fabric Thomas Burberry developed in the late nineteenth century, and the trench coat, tied to the First World War and then to a century of cinema. There is the check lining, a London address and a royal warrant. Each of those carries values a customer can feel through the cloth: protection, durability, a certain British reserve.

In the years before the downturn the brand had been pushing upmarket, raising prices and investing in leather goods and a more fashion-led image. That strategy asked the values to travel into categories where the assets did not follow them. A Burberry handbag competes against houses whose handbags are their heritage. A Burberry trench, by contrast, has few rivals that can claim the same history.

The ladder of luxury

The Promise Ladder measures how deep a promise reaches, across five rungs from the empty slogan to a higher call. Luxury lives mostly on the third and fourth: the Value Promise, resting on capabilities that are yours alone, and Cultural Resonance, where customers use the brand to say who they are. Each rung rests on the one below it, and the climb is cumulative.

Read this way, the price increases on handbags were a bet on the fourth rung in a category where Burberry had not built the third. Customers were asked to pay for identity without the capability that would justify the price, and in a slowing market many declined. Outerwear works in the opposite direction. The capability is proven every time it rains, which gives the cultural meaning something solid to stand on. Burberry Forward is, in effect, a step back down to the rung its proofs cover, with the aim of climbing again from there.

Heritage you can wear

A return to heritage carries a risk of its own, because a brand that only looks backwards ends up selling memories. From outside, the plan appears to use heritage as working material: campaigns built on weather and outerwear, recognisably British faces, and a range organised around what the house makes best. The question to watch is what happens when demand for luxury picks up again, and with it the temptation to climb fast.

The broader point concerns sequence. A brand can raise its promise, and luxury houses do so all the time, as long as the new height rests on proofs the customer already accepts. For Burberry, those proofs had been hanging on the coat rack for a century.

If your company is weighing a move upmarket, Value Proposition Design starts by naming the rung your proofs cover today, and that is where what we do begins.