Burberry
1. Introduction
1.1 Burberry was founded in 1856; originally focusing on producing ‘innovative functional outwear.’ Over the years Burberry has adapted to changing trends and tastes to suit the consumers wants and needs. Additionally the extension of their product portfolio, for example their perfume and accessories range, is a response to competition from leading brands such as Ralph Lauren and others. Burberry set out to create a luxury, premium brand image, however in recent years in Britain especially, the public perception of Burberry products have been labelled as ‘chav look’ because of their distinctive tartan pattern on clothing.
In September 2012 the high brand luxury clothing company Burberry issued a profit warning taking £1bn off Burberrys market value resulting with a share fall of 19%. We are currently in an economic recession which has resulted in less consumer confidence and a trend of reduced spending habits. However the types of consumers that purchase brands like Burberry would usually not be effected by the economic recession. They are likely to have much more disposable income and secure well-paid jobs. Retail analyst Jaana Jatyri stated that “The global economic crisis is dragging on and the longer it drags on the less confident even wealthier individuals become”. Meaning that even those with more disposable income to spend on luxury goods such as Burberry, are less confident which is a major factor resulting in reduced spending habits. If consumers are spending less the company is likely to result in profit losses. If the problem deteriorates it can result in closing of stores and making staff redundant; adding to the already high unemployment figures. Burberry as a luxury brand is not immune from the economic instability which has seen weaker sales not only in the UK but globally.
From researching Burberry’s share decrease we can see that the 2012 London Olympics has played a major factor in profit loss. The types of customers
1.1 Burberry was founded in 1856; originally focusing on producing ‘innovative functional outwear.’ Over the years Burberry has adapted to changing trends and tastes to suit the consumers wants and needs. Additionally the extension of their product portfolio, for example their perfume and accessories range, is a response to competition from leading brands such as Ralph Lauren and others. Burberry set out to create a luxury, premium brand image, however in recent years in Britain especially, the public perception of Burberry products have been labelled as ‘chav look’ because of their distinctive tartan pattern on clothing.
In September 2012 the high brand luxury clothing company Burberry issued a profit warning taking £1bn off Burberrys market value resulting with a share fall of 19%. We are currently in an economic recession which has resulted in less consumer confidence and a trend of reduced spending habits. However the types of consumers that purchase brands like Burberry would usually not be effected by the economic recession. They are likely to have much more disposable income and secure well-paid jobs. Retail analyst Jaana Jatyri stated that “The global economic crisis is dragging on and the longer it drags on the less confident even wealthier individuals become”. Meaning that even those with more disposable income to spend on luxury goods such as Burberry, are less confident which is a major factor resulting in reduced spending habits. If consumers are spending less the company is likely to result in profit losses. If the problem deteriorates it can result in closing of stores and making staff redundant; adding to the already high unemployment figures. Burberry as a luxury brand is not immune from the economic instability which has seen weaker sales not only in the UK but globally.
From researching Burberry’s share decrease we can see that the 2012 London Olympics has played a major factor in profit loss. The types of customers