Burberry Case Study

Only available on StudyMode
  • Download(s) : 283
  • Published : February 1, 2011
Open Document
Text Preview
BURBERRY
Introduction
Rose Marie Bravo, CEO for Burberry from 1997 until now (2003). Changed company from “heavily reliant on licensing and distribution ”(1997) to “leading luxury brand”(2003) Revenue increase: £225 million in 2000 almost £600 million in 2003. She has been able to successfully steer the company through an initial public offering of 22.5% in 2002. History: Founded in 1856 by 21 year old Thomas Burberry, who opened a draper’s shop and soon invented gabardine, a waterproof and breathable fabric that was chosen to be official coat of British Army in World War I. In 1920’s Burberry check pattern – a camel, black, red and white plaid design was introduced and it became registered trademark. Celebrities (Humphrey Bogart and Ingrid Bergman in Casablanca, Peter Sellers in The Pink Panther, and Audrey Hepburn in Breakfast at Tiffany’s), expeditionists seeking to conquer the South Pole and Everest were often seen in Burberry “check”. Even British royalty, King Edward VIII was known to say: “Give me my Burberry”, being a regular Burberry wearer. In 1955, Great Universal Stores Plc. (GUS) – a British holding company bought Burberry. In 1970 with first sale to Japan, company started to realize license agreements across the world. By 1990s Burberry had limited control over licenses sold making its brand price, design and quality vary across markets; “parallel trading” (sale of products at prices, channels and locations without respect to brand image) became common, especially in Asia. Business was profitable, but earning quality was low; customers were mainly older males and Asian tourists. It had lost its exclusivity and Far East accounted for 75% of sales. The Rose Marie Bravo Era: Bravo, a native New Yorker with 25 years of experience in industry as president of Saks Fifth Avenue joined Burberry in 1997 with a goal to transform Burberry from tired outwear manufacturer into luxury lifestyle brand. She recruited new team of people who knew what it took succeed n a retail environment, who knew what customers wanted and where gaps were. She changed the name from Burberry’s to Burberry, introduced a contemporary logo and packaging. Repositioning the brand: Bravo started with surveying the market and identifying the gaps to position themselves and decided there was a niche for company between labels as Polo Ralph Lauren and Giorgio Armani in apparel and Coach and Gucci in accessories. Burberry would be a functional, accessible, aspirational luxury brand. Updating the Product Line: Bravo adopted the following changes in Burberry: * Lowered SKUs (stock-keeping unit) from 100,000 to 24,000 to eliminate outdated designs * Hired new design team to redesign Burberry’s traditional products and extend image to new products * 2 types of products: (1) continuity – life cycles expected to last over # of years (2) fashion-oriented-responsive to fashion trends, introduced on collection-by collection basis * 3 primary collections:

(1) womenswear-450-500 styles each season wt focus on autumn/winter season; however 2000 spring/summer collection had enormously popular check bikinis. Michele Smith, Head of Womenswear noted products to be -sporty, functional, protective. (2) 330-350 styles per season. Stan Tucker (formerly worked for Saks Fifth Avenue), Head of Menswear said aim customers were cross-generational, from 25 yr old guy at first job to 60 yr old investment banker. (3) Accessories – included both “soft” (scarves, shawls, ties) and “hard” (handbags, leather goods, shoes, umbrellas, eyewear) ones with wide price range. * Burberry gained more control over design, sourcing, manufacturing, and distribution. When specific expertise was required company worked with licenses wt rights to design, manufacture and distribute under Burberry’s name with 10% of company revenues as license revenues. * Company took tighter control over distribution, reined many licensing agreements to curb inconsistencies in...
tracking img