Angela Ahrendts is the CEO of Burberry.
Burberry’s CEO on Turning An Aging British Icon into a Global Luxury Brand by Angela Ahrendts
PHOTOGRAPHY: GETTY IMAGES
Before Angela Ahrendts became Burberry’s CEO, licensing threatened to destroy the brand’s unique strengths. The answer? Centralize design and focus on innovating core heritage products.
hen I became the CEO of Burberry, in July 2006, luxury was one of the fastest-growing sectors in the world. With its rich history, centered on trench coats that were recognized around the world, the Burberry brand should have had many advantages. But as I watched my top managers arrive for our first strategic planning meeting, something struck me right away. They had own in from around the world to classic British weather, gray and damp, but not one of these more than 60 people was wearing a Burberry trench coat. I doubt that many of them even owned one. If our top people weren’t buying our products, despite the great discount they could get, how could we expect customers to pay full price for them? It was a sign of the challenges we faced. Even in a burgeoning global market, Burberry was growing at only 2% a year. The company had an excellent foundation, but it had lost its focus in the process of global expansion. We had 23 licensees around the world, each doing something di erent. We were selling products such as dog coverups and leashes. One of our highest-pro le stores, on Bond Street in London, had a whole section of kilts. There’s nothing wrong with any of those products individually, but together they added up to just a lot of stu —something for everybody, but not much of it exclusive or compelling.
January–February 2013 Harvard Business Review 39
HOW I DID IT
In luxury, ubiquity will kill you—it means you’re not really luxury anymore. And we were becoming ubiquitous. Burberry needed to be more than a beloved old British company. It had to develop into a great global luxury brand while competing against much larger rivals. Among luxury players, Louis Vuitton Moët Hennessy (LVMH) had almost 12 times—and Pinault-Printemps-Redoute (PPR) more than 16 times—Burberry’s revenue. We wanted a share of the disposable income of the world’s most elite buyers—and to win it, we’d have to ght for prime real estate in the world’s most rapidly growing consumer markets. In many ways, it felt like a David-and-Goliath battle.
On the surface, I might have seemed an unlikely CEO for a company that was considered quintessentially British. I was raised in a small town in Indiana and educated at Ball State University. I was a classic midwesterner—something the Financial Times had fun mocking when I rst took the job. But I’d been fortunate enough to work with and learn from some of the most inspirational leaders in the fashion industry, from Paul Charron to Donna Karan. And I had 25 years of experience on my side. I also clearly had one attribute that made me a good t: I admire and respect great brands and helped to build some over
One “Brand Czar”
global luxury brand, we had to have one the years. From Apple to Starbucks, I love global design director. We had an incredthe consistency—knowing that anywhere ible young designer named Christopher in the world you can depend on having Bailey, with whom I’d worked at Donna the same experience in the store or being Karan and who I knew was a sensational served a latte with the same taste and in the talent. So I introduced him early on as the same cup. That’s great branding. Unfortunately, Burberry didn’t have “brand czar.” I told the team, “Anything that the consumer sees—anywhere in a lot of that. An experience in any given the world—will go through his o ce. No Burberry store in the world might be very di erent from the customer’s previous one. exceptions.” Within a year we had let the entire Hong As part of my transition, I spent six months working closely with my predecessor, hit-...