The evolution of Burberry FACTS!

Implications: -When I joined Burberry in the early 1990’s it was a disparate company with every market having its own agenda and a multitude of licensing agreements to boot. The product that was in Spain was different than that of Asia which in turn had nothing to do with the assortment in the States. The company was successful by mistake and run as an archaic operation with practices dating back 25 – 50 years. There were so many “deals” and agreements that the merchants could pretty do what ever they wanted to regionally.

Analysis:

-In the U.S. market, where I was the S.V.P. of merchandising we took full advantage of all the positives the central brand (then headquartered in Chatham Place, Hackney) offered, cleaning them out of distressed goods to put on sale semi annually taking advantage of all the overstock positions due to the chaotic sourcing and manufacturing dynamic (or lack there of). We supplemented the sale with product designed, sourced and manufactured in Western Europe and the U.S. that was congruent with the quality and brand aesthetic at wide margin.

-The brand had no global identity with the exception of the iconoclastic plaid and our Trench coats. This being said every market took advantage of the poor centralized corporate structure and designed, manufactured and produced the classifications that were important to their particular region. Spain was driven by sportswear, Asia was driven by any thing plaid and North America was driven by all classifications with a strong men’s and women’s clothing and furnishings business that complimented the rainwear and plaid items.

-We made a fortune! The downside is that there was no synergy and no global brand identity. The Trench you bought in Tokyo had very little in common with the American made trench manufactured in Williamstown, NJ.. Despite the vision of Victor Barnett, who saw the future and had a game plan to emulate the other successful luxury brands, we were all too addicted to the cash we were spinning off regionally.

-When Leonard Wolfson, Mr. Barnett’s first cousin and the de facto leader of the company retired, Mr. Barnett took advantage of his position and brought in Rose Marie Bravo. BRILLIANT move! Although Ms. Bravo made a few minor mis - steps in the beginning of her tenure (Roberto Menichetti as head designer) she did a GREAT job in globalizing the brand and eliminating all the fiefdoms that existed. She used all her contacts and savvy to bring Burberry into the pantheon of Hermes, Gucci etc. Ms. Bravo and her team totally revamped the marketing, brought modernity to the assortment and spent her advertising money sapiently.

-Now to the current dilemma! The brand is on the precipice of becoming a one trick pony. (Not referring to the Porsum logo). The line is overly reliant on the plaid and all its iterations. The non iconoclastic merchandise is not performing well, despite the great design direction of Christopher Bailey. The newly updated outerwear is the exception. The company cannot grow as easily as the competition because at its core it is still a cold weather driven assortment. Yes the women’s swimwear is clever and whimsical but this and a few other cute items do not make for a complete collection.

-The key to success is to lower the penetration of sales derived from the plaid and rainwear and develop an aspirational clothing and furnishings line that actually sells. A smart counteragent would be to bring in a London based designer (i.e. Stella McCartney) and create a buzz for the clothing and furnishings as mentioned.

-Cutting the S.K.U. count is of course the correct thing to do but it is operational retailing 101. What is needed going forward is a freshening and introduction of new classifications that can stand on their own.