Burberry has seen a rebound in its business in China following a sharp decline two years ago, driven by the country’s broader economic slowdown and weakened consumer confidence. The luxury brand’s recent recovery is attributed to new leadership and a strategic refocusing on core products.

Joshua Schulman, Burberry’s chief executive since July 2024, has reversed the company’s downward trajectory by emphasizing classic items like trench coats and scarves, and tailoring marketing efforts to resonate with younger Chinese consumers. His approach includes incorporating local cultural elements, such as Lunar New Year campaigns featuring Zodiac animals, to strengthen the brand’s appeal among Generation Z shoppers.

Greater China remains a critical market for Burberry, accounting for approximately 28 percent of the company’s direct revenues—£670 million out of a total £2.4 billion in the year ending March 2025. When combined with sales by Chinese visitors overseas, the region represents between 35 and 40 percent of the brand’s global revenue. More broadly, the Asia-Pacific region contributes roughly 44 percent of Burberry’s direct sales, which are especially valuable as they come through company-owned channels, providing higher profit margins compared to wholesale or franchise distribution.

Following a period of decline linked to China’s housing market turbulence and a general tightening of consumer spending, Burberry’s Greater China revenue stabilized last year with a 4 percent like-for-like increase, although this remains below the peak experienced in 2021-22 following pandemic-related buying surges. Globally, the company’s overall revenue remained flat, but cost-cutting measures, including job reductions, helped push adjusted operating profit to £160 million from £26 million the previous year. This improved the operating margin to 6.6 percent from 1 percent, while adjusted earnings per share swung from a loss of 14.8 pence to a gain of 15.2 pence. Free cash flow also more than doubled to £141 million.

Despite improvements driven by Asia, particularly China, Burberry continues to face strategic challenges. Sales in the Americas rose roughly 10 percent in the last quarter of the year, but growth in Europe was more subdued. Schulman is exploring opportunities to reduce reliance on the Chinese market by expanding into Southeast Asia and Latin America and enhancing wholesale and digital sales channels. Efforts are underway to strengthen Burberry’s presence in leather goods, footwear, beauty, eyewear, and fragrance categories.

However, the company remains heavily dependent on a single brand with a product range focused on traditional luxury fashion, which raises questions about its ability to sustain long-term growth. Analysts have highlighted concerns that the brand’s popularity in Asia could be vulnerable to shifts in consumer preferences or changes in social media influence. Some investors suggest a possible merger with a larger luxury conglomerate such as LVMH, Kering, or Tapestry could be a strategic path forward. Notably, Frasers Group, controlled by Mike Ashley, holds a 4.2 percent stake in Burberry.

Shares of Burberry fell from £26 to below £6 before Schulman’s appointment and have since recovered to around £10, though they remain below previous highs. The company’s price-earnings ratio stands at about 26, and no dividends are currently expected. Market watchers remain cautiously optimistic that Burberry’s renewed focus may offer a foundation for future recovery, but recognizing the challenges ahead in sustaining long-term growth.