Financial ups and downs

During her first few years with Burberry, Bravo and her team had to deal with the Asian economic crisis and the effects it had on the Burberry brand. FYI: The Asian economic crisis was a period of financial emergency that gripped much of Asia beginning in July 1997, and raised fears of a worldwide economic meltdown due to financial contagion. While the company worked on positioning itself among luxury leaders in the fashion industry, Burberry began facing problems caused by its over-dependence on Asian customers. In 1998, sales decreased by seven percent and profits plummeted in its retail and wholesale segment due to the Asian economic crisis. The company began to slow down its shipments to the Asian grey market—a market in which its products were sold cheaply or re-imported back to Europe and sold at a discount—and shut down three production facilities in the United Kingdom. Whereas this decision hurt the firm’s profits in 1998, management felt it would, in the long run, protect the Burberry image.

As Burberry entered the new millennium, its financial results improved dramatically. The Asian market recovered, its European and American markets grew, and its new brand strategy began to pay off. Financial reports for the last few years (2008-2011) show that Burberry is continually growing and exceeding financial expectations. Some of the brand’s highlights include strong financial performance (Revenue up 27% and retail/wholesale revenue up 29%), strategic operational progress, and continued focus on investing for growth.

http://www.burberryplc.com/bbry/newsrel/finnews/2011/2011-01-18/

"Burberry Ltd." International Directory of Company Histories. 2001. Encyclopedia.com. 28 Sep. 2011 <http://www.encyclopedia.com>.

From a Branding Perspective

CEO of Burberry, Rose Marie Bravo

In my last post, one of the highlights on Burberry's timeline was that in 1997, Rose Marie Bravo was hired on as the CEO of Burberry. It was the smallest description on that timeline, yet had an amazing impact on the brand of Burberry and its future. I discussed in a classroom forum today how Burberry faced repostioning challenges when it was time for the brand to revamp their unexciting and slowly evolving product line. Bravo is mostly to thank for Burberry's transformation and successful launch of a new product position. The following was the discussion topic:


"Repositioning is a challenging strategy. What are some of these challenges, and how did Burberry manage to deal with them?"




Some of the obstacles that Burberry faced in repositioning were transforming the brand’s image without compromising core values, redesigning the product mix and positioning it cleverly, and hiring a new team that was trained in interpreting and analyzing consumer market trends. Burberry also wanted to keep focus on the importance of the aesthetic values of the brand’s identity. Rose Bravo did an amazing job with revamping the brilliant brand that already was Burberry. She made several modifications to what most think of as cosmetic changes, such as the brand’s name (Burberry’s to Burberry) and introducing a more modern logo and packaging designs. These changes, though, did not distract from the core quality and accessibility of the British brand. Additionally, with her new team, Bravo studied the luxury market and had one goal to work toward: establish a niche where Burberry could grow, and create a product mix capable of sustaining traditional products while adding complement products to the mix. Once Bravo got this ball rolling, the addition of designer Christopher Bailey in 2000 boosted Burberry’s image and has continued to prove their reposition successful.

Christopher Bailey of Burberry

Hameide, aled . Fashion Branding Unraveled. Fairchild Books & Visuals, 2012. <http://books.google.com/books/feeds/volumes?q=978-1-56367-874-5>.

About the brand

Burberry is a manufacturer and marketer of men's, women's, and children's apparel, as well as accessories and fragrances. The Burberry name is virtually synonymous with the tan gabardine raincoat pioneered by the company more than 145 years ago. Writing for WWD (Women's Wear Daily) in 1989, Andrew Collier described the garment as "a mainstay in outerwear worldwide, that symbolizes all that is Britain: sturdy and unassuming, equally at home. in fine hotels, and muddy lanes." In 1999, the firm launched the Prorsum designer collection as part of its efforts to reinvent Burberry's luxury brand status. An icon of classic clothing, Burberry has utilized licensing and brand extensions to appeal to a younger generation of fashion-conscious customers.

Burberry Prorsum Fall Winter 2011-2012 Ad Campaign


Timeline:


Thomas Burberry

1856: Thomas Burberry establishes his first shop.
1891: Burberry begins selling clothing under the Burberry name in London's Haymarket section.
1909: The firm registers the "Equestrian Knight" trademark.
1915: Burberry ships its raincoats to Japan.
1966: The firm becomes a wholly owned subsidiary of Great Universal Stores.
1994: The company begins using well-known model Christy Turlington in its ad campaigns.
1996: By now, Burberry has accumulated a record six Queen's Awards for Export Achievement and ranks among Great Britain's leading clothing exporters.
1997: Rose Marie Bravo is hired as CEO.
1998: The Asian economic crisis causes financial problems for the firm.
1999: Burberry launches the Prorsum collection.
2000: Burberry breaks ground on a new flagship store in London.

Burberry's London Flagship store

Just a little background...

From its founding by Thomas Burberry in 1856, Burberry has become the leading British luxury brand globally. Still located in London, United Kingdom, the company has branded stores and franchises around the world, and also sells through concessions in third-party stores. Although, Burberry is constantly strategizing in order to continue bettering the brand, the company is and will always be defined by the following characteristics:

• Britishness 
• Authentic outerwear heritage
• Historic icons: the trench coat, trademark check and Prorsum knight logo
• Democratic luxury positioning
• Innovation and intuition

In order to continue the lavish Burberry brand, the company executives focus on a mission strategy in which the Burberry name stands upon and strives to carry out each and every day. Some of these top executives include Sir John Peace, Chief Executive Officer, who has been Chairman of the Board since 2002. Also among execs are the following: Angela Ahrendts, Chief Executive Officer, Stacey Cartwright, Executive Vice President and Chief Financial Officer, and Philip Bowman, Senior Independent Director. Additionally, the Chief Creative Officer is Christopher Bailey, who is responsible for the company’s overall image including all advertising, corporate art direction, store design and visuals as well as the design of all Burberry collections and product lines.

http://www.burberryplc.com/bbry/corporateprofile/