Burberry was founded in 1856 in Basingstoke (England) by Thomas Burberry. So, investors can consider that the company has a unique heritage associated with Great Britain because many people consider that the brand represents an authentic British lifestyle. First, let's take a look at the history of the firm:
1891: Burberry's retail business expanded to London when a shop opened in the Haymarket selling outerwear to sportsmen.
1910: the first French store was opened on the Boulevard Malesherbes, the site of the current store, in Paris.
1912: the Burberry store in the Haymarket moved to its present location at 18/22 Haymarket which today serves as the corporate showroom.
1924: George Mallory selected Burberry apparel when he attempted his ascent of Mount Everest.
1955: Burberry was acquired by GUS.
[...] Future trend Because of 2004 share trends we may assume that 2005 trend will in best case remain at this level or will probably decrease The first issue is that roughly £400 per share is not a fair valuation of the firm In luxury industry acquisitions are a usual phenomenon so it is possible that groups such as LVMH, Gucci Group or Richemont try to takeover the firm. Then, there should be consequences on the share price. And thanks to the premium, it should be a great deal for shareholders. [...]
[...] If last year a lot of stores were opened in Europe, today the brand has been developed in Asia: in Hong Kong, Singapore or Taiwan. But the criteria of selection are very strict, after three years the store must show a profit above Threats The luxury market is sensitive to the economic context The main threat for a luxury brand is the economic context. Indeed in the past years this market had a lot of difficulties because of the economic context. [...]
[...] It was indeed one of the first year Burberry made such a turnover: and what will happen in 2 or 3 years if the market becomes bearish? Furthermore, the share price has reached its top level since a couple of year. It may come to saturation: it has indeed increased by in 2004 and you had to pay 402.5 for one share on January, 25th of the year 2005. These figures show that if Burberry's shares continue to increase, its price could be disconnected from the reality and from the potential risk of this market. [...]
[...] The company sells all over the world As it was said in the general presentation of the firm, the company is settled all over the world, even in France, where the competition is very tough Weaknesses The growth of the sales is not convincing Although Burberry announced that sales had done well, the results of the year 2003 are lukewarm. Indeed, Burberry said that sales were good in continental Europe; however the firm said UK sales were weak. Then, in Asia for example sales in Hong Kong and south East Asia grew strongly, but in Korea sales "continued to be volatile" and were flat over the quarter. [...]
[...] In fact a lot of hooligans have become as loyal to the Burberry brand as they are to the sport and so in Leicester for example pubs have banned drinkers wearing Burberry. Financial Analysis: Burberry knew a successful IPO in July 2002. The group acquired all its distributors in Korea in a program of taking direct control ok key markets outside Japan in 2002. The group keeps having growth strategies across products, channels and regions. Burberry's turnover is composed of revenue from: - wholesale - retail - licensing operations In March 2003, gross profit as a percentage of turnovers expanded to 56% in the year from in the comparative period. [...]
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