Introduction

• Burberry is a global luxury brand with a distinctive British heritage,

core outerwear base and one of the most recognized icons in the
world. Burberry designs, sources and markets apparel and
accessories, selling through a diversified network of retail, digital
commerce, wholesale and licensing channels worldwide. The business
is managed by channel, region and product, supported by corporate
functions.
 Case Study Synopsis
• Founded in 1856 by Thomas Burberry

• British used trench in WWI

• Trademark - (a camel, black, red, and white plaid design)

• Used in lining of signature trench coats

• Original designs and quality

• Celebrities, royalty, politicians, etc.

• Symbol luxury and durability

Case Study Synopsis
• In 1955, Great Universal Stores Plc. bought Burberry

• licensed the brand in Japan through Mitsui and Sanyo

• Global recognition through licensing and distribution agreements.

• 1997 new CEO Rose Marie Bravo

• Cosmetic - logo and brand name

• Update product line - consistency

• Reposition - keep consumers and attract younger customers.

Case Study Synopsis
• 2003- Primary Collections

• Womenswear, Menswear, Accessories

• 3,162 wholesale doors worldwide

• 434 department stores

• 2,728 specialty stores

 Case Synopsis
• Biggest challenge

• Create a consistent brand image

• Risk losing brand and credibility

• Prorsum - luxury line

• Advertising Campaign : 2 phases

• Stella Tenant

• Kate Moss
 Case Synopsis
• Challenges

• Counterfeits

• Popular among urban and hip-hop musicians.

• Sustainability

• Brand positioning

• Burberry = healthy

• Manage popularity = long-term growth

Within the Burberry offering, there is a product hierarchy
defining components - each with unique branding and a
distinctive identity.
 Prorsum
• Most fashion forward
collection

• Centered around runway

shows each year

• Latin word for “moves

forward”

• Inspires the other lines

• Hand-tailored
Runway Video
 Burberry London (International) Line

• Core collection

• High-end positioning

• Key to the turnaround of the

Burberry brand

• Strong womenswear and

accessories segments

• Main markets are currently in

Europe and US

• Products mainly sourced in Europe

and UK

• Thomas Burberry Spain & Portugal

 Burberry London (Japan) Line

• Sold in Japan and made

locally

• High quality apparel but

lower positioning and
price points than the
International Line.

• Weaker accessories due to

licenses held buy small
manufacturers.

• Blue and Black Labels

 Burberry Brit
• Customer wears on
weekend

• Casual wear

• Uses innovative and

more contemporary
versions of the check.
Game
 Answers

London Brit Prorsum

Prorsum London Brit

 Burberry Brand
• Defined by:
• Authentic British heritage

• Unique democratic positioning within the luxury arena.

• Founding principles of quality, function and modern classic style,

rooted in the integrity of its outerwear.

• Globally recognized icon portfolio: the trench coat, trademark check

and Prorsum horse logo.
 Burberry Business
• Defined by:
1 Design, marketing and retail-led strategies

2 Digital focus and integration

3 Channel diversity: retail, digital commerce, wholesale and licensing

4 Multi-category competency: non-apparel, womenswear, menswear

and children’s wear.

5 Global reach and balance: across core regions and emerging markets
 Culture
• The culture is distinguished by:
1 Core values: to protect, explore and inspire

2 Democratic and meritocratic ethos

3 Collaboration and connectedness

4 Contributing to its communities, including through the Burberry

Foundation.
Burberry sells its products to the end consumer through
both the retail (including digital commerce) and
wholesale channels. For 2009/10, retail accounted for
58% of revenue and wholesale 34%.
 Channels : Retail
• 131 mainline stores

• 262 concessions within department stores

• 47 outlets

• Digital commerce in 27 countries

Channels : Wholesale
• Includes sales to prestige department stores
and specialty retailers worldwide.

• Sales to its franchisees who operate 97

Burberry stores, mainly in Emerging Markets.
Europe including Spain accounted for 44% of sales, Americas 27% and Asia Pacific
24%. Emerging Markets, which spans across all regions and includes China, India,
Russia, Eastern Europe and the Middle East, contributed 10% to retail and
wholesale revenue.
1 Americas: includes US, Canada, Central and South America
2 Asia Pacific: includes China
Outerwear, which is the core of the apparel offer at over half of sales, is the category in
which Burberry is top-of-mind among consumers.
Burberry continues to grow outerwear by continued product innovation.
Another key strategy is to grow non-apparel where revenue increased by 10% underlying
in 2009/10.
Burberry is planning further growth in all areas of the business over the next few years.
Channels: Licensing
• Selective licensing agreements in Japan and globally,
leveraging the local and technical expertise of its license
partners.

• Royalty income primarily received from Burberry’s

licensees in Japan.

• Its global licensees

• fragrance

• eyewear

• timepieces

• small menswear

• European children’s wear

Social & Environmental Achievements
2010-2011
Increased the number of factories with worker hotlines by 54% to a total of 33.
1 Joined the Ethical Trading Initiative – the first luxury brand to do so.
2 Launched a Sustainability Digital Film to employees globally to raise awareness of corporate
sustainability initiatives.
3 Committed to increase the proportion of the Group’s UK electricity purchased from combined
heat and power sources from 29% to 100% to drive demand for renewables in the UK.
4 The Burberry Foundation distributed over 2,500 iconic trench coats to partner charities in
London, New York City, Hong Kong and Seoul, all working with disadvantaged youth.
 Kate Moss Scandal

• Burberry distanced itself from Moss in

September 2005, days after The Daily
Mirror published pictures of her
allegedly snorting cocaine.

• The company dropped plans for Moss

to appear in its fall 2005 campaign,
and posters featuring the model were
removed from its flagship store.

• Burberry stressed in November that it

had not severed ties with the model.

• A year later she got back with

Burberry.
Positioning
 Geographical Mix
• Under Retail
• Low transactional exposure
• Outsourcing of productional activities
• Allows production in various countries
and currencies.
• Yen - Japan license
Vertical Integration
• Under Retail

• Recent acquisitions of licensees in Spain

• Distributors in Korea and the Asia Pacific

• Combined with ambitious retail extension

• Not very integrated

• Deliberately has limited production

capabilities.
 Business Mix

• In the middle of luxury and retail.

• Consists almost entirely of apparel and

accessories.

• Burberry’s business mix seems comparable to

that of H&M, Hugo Boss and Inditex but also
to that of Gucci and Hermès.
 Pricing Power
• Burberry sells premium products in a high-quality distribution network.

• This positioning is synonymous with higher prices and higher

distribution costs.

• The company has much lower transactional exchange exposure than luxury
goods companies

• Therefore does not need to make up as much revenue in times of

adverse exchange-rate movements.

• Burberry has in the past increased fees due by its Japanese licensees, Sanyo
Shokai and Mitsui & Co.
 Design & Quality
• High on Luxury goods category

• Christopher Bailey worked at Donna Karan and

Gucci.

• Core heritage products

• A high fashion range - Prorsum

• high end product line - London

 Management
• Under Retail

• CEO- Rose Marie Bravo

• Retail and Wholesale background

• President of Sak’s Fifth Avenue in US

• Chairman and CEO of Macy’s speciality

division.

• Angela Ahrendts - CEO July 2006

• Executive Vice President - Liz Claireborne

• President of Donna Karan International

CEO Video:Angela Ahrendts
 Strengths
• Strong proven management team

• Licensing growth delivers high return on capital

• Heritage products

• Flexibility in product sourcing

• Lower transactional exchange exposure

 Weaknesses
• Low vertical integration reduces capture of
margin and value from manufacturing.

• Low gearing into Japanese upside.

• Apparel segment - increased risk still accounts

for most of company profits.
 Opportunities
• Retail network expansion

• Widening of wholesale distribution

• Extension of apparel offering

• Further development accessories (Spain & Japan)

• Increased distribution of Burberry London (Japan)

 Threats
• Conflicting interests of GUS and external Burberry
shareholders.

• Reliance on 3rd parties in Japan

• Counterfeiting

• Control over licensees and wholesale accounts

• Company is mono-brand and trademark is core.

 Conclusion
• Explore opportunities

• Demographic Studies

• Know their threats

• Relied on Licensing ---> Repositioning

• New image -----> Success

• Compete with some of the best luxury brands.

• Sustainability
Any Questions?