Burberry’s brand value has plunged in the past year as the company fights the dual challenges of a luxury downturn and a disastrous internal turnaround plan.

Kantar’s annual BrandZ ranking of brand value saw Burberry lose nearly $2 billion in brand value compared with 2023. The group was the second-biggest faller among a ranking of the U.K.’s 75 most valuable brands, behind financial advisor St. James’s Place.

The luxury industry is fighting a downturn that has been felt across the board, as buyers rein in “revenge shopping” that bounced after the COVID-19 pandemic, while the richest proved they weren’t completely insulated from the cost of living crisis.

LVMH’s Bernard Arnault was bumped from his title of the world’s richest man to as low as the fifth richest after LVMH’s shares faced a wipeout. Swiss watchmakers were similarly affected and forced to put their staff on state-funded furlough amid a downturn.

The luxury downturn “makes it all the more important that these brands really stand out from the competition—both from high end and the high street—in a way that is relevant and meaningful to shoppers to justify their prices. That’s something Burberry has struggled to do this year,” says Adele Jolliffe, head of brand consultancy, insights division at Kantar.

Burberry’s struggles

Unfortunately for Burberry, the luxury downturn coincided with continued internal struggles over a stuttered and drawn-out turnaround plan.

The U.K. luxury brand has halved in value through 2024. In July, the company ousted CEO Jonathan Akeroyd after issuing its third profit warning of 2024. It also suspended its dividend, causing shares to plunge.

Akeroyd inherited a struggle many of his predecessors also failed to conquer, namely a dreaded rebrand to shift it from mid-end to high-end luxury.

Burberry reportedly began laying off hundreds of employees in July as investors sold off shares in the company.

Dan Coatsworth, an investment analyst at AJ Bell, said in September that the company was vulnerable to a takeover as a result of its falling valuation.

The company was booted out of the FTSE 100—the premier club for the U.K.’s biggest stocks—in August after months of declines in its valuation.

After it was knocked off the FTSE 100 in August, Jelena Sokolova, a senior equity analyst at Morningstar, gave her insights into Burberry’s decline.

The key reasons for Burberry’s tumbling valuation were “high exposure to slower growing apparel and relatively small exposure in terms of revenue to iconic outerwear products,” said Sokolova.

“An unsuccessful push into fashion-forwardness with three creative director changes over the last 10 years and a failed push into leather goods, [which is a] very competitive area with strong established players where Burberry’s brand is not strong enough.