Sec B - Grp 15 - Burberry Case

8/3/2019 Sec B - Grp 15 - Burberry Case

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Akriti - 12407

Maya - 12439

Nilotpal - 12234

Rahul - 12347

Uday - 124714/28/2012 1


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1. 1856 - Established by Thomas Burberry at the age

of 21.

2. 1901 - The Burberry Equestrian Knight Logo was

developed containing the Latin word "Prorsum",

meaning forwards.

3. 1914- Chosen as the official coat of the BritishArmy at World War 2.

4. 1920- Introduced the famous check pattern .

5. 1955 - Great Universal Stores Plc. (GUS) brought

Burberry.

6. 1970 - GUS licensed the brand to Mitsui and Sanyo,

Japan .

7. 2002IPO in London Stock Exchange

8. 2006Began selling online.

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1856 - 2006


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Mid 1990 crisis1. Became licensed across a range of categories.

Exercised limited control over licenses.

2. Price, design and quality of products varied across local

markets.

3. Parallel tradingwholesalers sold to unauthorized

distributors who then sold it further without preserving

the brand image.

4. Brand dilution, loss of exclusivity. Far East Asia

accounted for 75% of disproportionate sales. 37million

pound decrease in sales.

5. Overly reliant on narrow base of core products

outerwear and umbrellas

6. Customer bases was heavily concentrated among

older males and Asian tourists.

7. Face strategic and structural issues and lacked both

cohesive vision and discipline.


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Mid 1990 crisis


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1. Rose Marie Bravo became CEO in1997. She

had 25 years of retail experience and hadoccupied leadership positions in several major

fashion businesses.

2. Initiated a radical reform of the British classic

brand and improvements of the company

structure.

3. 2002Time magazine fashion CEO of the

year.

4. 2003Award of the Council of Fashion

Designers of America.

5. Wall Street Journal listed her in its 2004 top 50hall of fame. Fortune Magazine ranked her #13

in its 2004 and 2005 lists of "The 50 most

Powerful Women in Business" outside the US.

6. 2005 - Bravo retired as a CEO and became vice

executive of Burberry

Rose Era 1997-05
http://en.wikipedia.org/wiki/Wall_Street_Journalhttp://en.wikipedia.org/wiki/Fortune_Magazinehttp://en.wikipedia.org/wiki/Fortune_Magazinehttp://en.wikipedia.org/wiki/Wall_Street_Journal


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Rose Era 1997-051. Became licensed across a range of categories.

Exercised limited control over licenses.

2. Price, design and quality of products varied across local

markets.

3. Parallel tradingwholesalers sold to unauthorized

distributors who then sold it further without preserving

the brand image.

4. Brand dilution, loss of exclusivity. Far East Asia

accounted for 75% of disproportionate sales.

5. Overly reliant on narrow base of core products

outerwear and umbrellas

6. Customer bases was heavily concentrated among

older males and Asian tourists.

7. Face strategic and structural issues and lacked both

cohesive vision and discipline.


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The Team

Stanley Tucker,

Fashion Director,

Saks

Christopher Bailey,

Designer Womanswear,

Gucci

Mario Testino,

Fasion Photographer


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Brand Repositioning1. Reposition the brand to attract younger customers.

2. Retain older customers.

3. Targetto become one of the top luxury fashion

brands.

4. New contemporary logo.

5. Identified the gap between Burberry and the top

luxury brands such as Armani and Polo in apparel

and, Coach and Gucci in accessories.

6. Position Burberry within the gaps.

7. Reposition but dont be either too classical or toomuch into cutting edge fashion.

8. Burberry should represent accessible luxury.

9. PODAspirational but functional. Trench coat

keeps you warm and dry.


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New product line1. Number of SKU reduced from 100,000 to 24,000.

2. Continuity products and fashion oriented products.

3. Womanswear - Introduced 450500 apparel style

each season. Menswear - Introduced 330- 350

styles per season.

4. Soft accessoriesScarves, shawls, ties etc. HardaccessoriesHandbags, shoes, umbrellas, eyewear,

timepieces, etc.

5. Wide range of prices made them accessible at

entry points for potential new customers.

6. Non-licensed productsBurberry controlled

sourcing, manufacturing and distribution.

7. Licensed productsabout 10% of revenue in

royalties.


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Expanding brand portfolio

1. Burberry Londoncore company label. Low

priced label designed to appeal to the youngercustomer.

2. Thomas BurberrySpain and Portugal.

3. Burberry BlueJapanese women.

4. Burberry BlackJapanese men.

5. ProrsumHigh profile, high end luxury brand

to appear alongside the fashion greats.

6. Limited distribution of Prorsum to keep it

exclusive for customers truly interested infashion.

7. Burberry Britperfume for women in their

30s.

8. Burberry Sport


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Expanding brand portfolio


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Brand element Check

1. Restrain in the use of the check to maintainexclusivity.

2. 40% of apparel did not feature the check.

3. 60-70% of sales in accessories featured the

check.

4. 25% of all company revenue was derieved

from check products.

5. Some customers brought Burberry

specifically for the check.

6. Check management and check under cover

philosophy.


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Advertisement


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Advertisement


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1. 2002worldwide 3162 wholesale doors.

2. 34 departmental stores.

1. 132 specialty stores.

2. Gross margin were 56% in 2002 compared to

47% in 2000.

3. Expanded greatly on the US market.

4. Bravo era - sales doubled from 470 million to 1

billion USD.

5. According to Business Weekly, Burberry is the

98th most valuable brand in the world

6. Almost sales distribution across categories.

7. Biggest marketsJapan and Spain

Year Opr. Profit(mil )

Opr. Profit%

2000 18.5 9.2

2001 65.1 15.2

2002 85.4 17.1

2003 110.3 18.6

Category (2003) % of Sales

Menswear 33.3

Womenswear 27.4

Acessories 28.6

Growth


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Challenges ahead

1. How to create products to meet the lifestyles

of diverse customers in terms of age,

location etc.

2. Maintain the current success, not be a

victim of its own success.

3. BravoThe brand has not yet reached its

full potential. Take it to the next level.

4. Brand management in non-target customers

such as the hip-hop community.

Angela Ahrendts,

CEO 2005 - present


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Learning

1. How a 150-year-old stereo typed brand has transformed itself into a fashionempire.

2. Brand can adapt to the changing market without sacrificing its core identity

(product, value, brand elements, British culture and history).

3. Hire top in the industry people.

4. Celebrity endorsement.

5. Selective distribution.

6. Balance between accessibility and status.

7. New product development.

8. Investment in high potential marketJapan, Spain, Portugal,


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ThankYou

Sec B - Grp 15 - Burberry Case

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