The Burberry brand is part of the luxury industry, so it is susceptible to all the changes and developments affecting that industry. Currently this sector has taken a beating with the economic crisis owing to the decline in tourism and stock shares are on the wane with most customers lying low during this crisis-ridden period. However, it continues to rely on constant factors such as high-income classes or even emerging markets like China.
The luxury industry is also expanding into new segments designed to attract a well-to-do clientele, not exactly the traditional wealthy clientele it originally targeted.Thus, with the market diversifying its products and subsequently its prices which props its sustainability, we can now speak of the concept of "affordable luxury products." Thus, the sector increases its prospective client base. Here's an idea of the economic weight of the luxury industry in the French economy, the industry is worth 106 billion francs, as much as the aerospace industry.
Regarding the evolution of its growth, the global luxury goods market is expected to decline, according to Bain, 5% to 10% at constant exchange rates in 2009, more than -3% to -7% as originally predicted. Accordingly, Burberry announced the downsizing of 540 positions in 2009. Since 2006, the brand has expanded its commercial network by opening new stores, in Bangkok (160m2), Madrid (585m2), Sydney (250m2), Abu Dhabi, Los Angeles and Austria.
It has also regained control of 12 stores in Taiwan, formerly operating under dealership agreements. Furthermore, the brand's outlets in Spain have been reorganized and renovated. However, in 2007, Burberry announced the permanent closure of its factory in Treorchy in Wales. The manufacture of its polos has been outsourced to China. But the brand has retained its two other factories in Britain.
In 2008, the British firm partnered with the American magazine Vanity Fair to promote the exhibition of the iconic images of photographers like Mario Testino, Annie Leibovitz and Helmut Newton at the County Museum of Art in California. Some of the associations actively collaborating with the Burberry Foundation include Into University (London) that offers educational assistance to students from disadvantaged backgrounds, Envision (London) and the Robin Hood Foundation (New York); such associations impart a benevolent image to the brand and thus positive popularity.
For the import and export of textile products, Burberry uses a single international distributor: Algomtl, founded in 1996, an online platform that facilitates the swift and independent conduct of business by enabling professionals involved in the import/export business to offer, sell or buy, anytime and anywhere, all that he/she wishes, with the visibility afforded by the platform's online ads.
These ads, which can be viewed in any corner of the globe owing to its online medium, provide a competitive e-commerce system for wholesalers and distributors.The company is currently headquartered in Paris, with a capital worth 37,000 and its domain owner is Gilles Boussin. The company has occupied the top spot in the international import/export business for the past 10 years. Meanwhile, e-commerce has grown by 27% over the third quarter of 2008, and subsequently, Burberry is hoping to improve its income.
Tags: Burberry, economic crisis, luxury industry, French economy, dealership agreements, textile products, Algomtl, online ads
[...] Accordingly, Burberry announced the downsizing of 540 positions in 2009 Competitive pressures The rates of growth of Burberry's main competitors Evolution of LVMH (Louis Vuitton) Evolution of the Dior brand Evolution of the Gucci group Breakdown of sales by brand Evolution of the brand Dior Faced with this increasingly stiff competition, Burberry indulged in a massive budget advertising campaign featuring the hottest models to showcase its collections for the same year Forms of international presence Since 2006, the brand has expanded its commercial network by opening new stores, in Bangkok (160m2), Madrid (585m2), Sydney (250m2), Abu Dhabi, Los Angeles and Austria. [...]
[...] International Strategy On the company website, www.burberryplc.com, we can find the whole strategy of Burberry, with details regarding the five major objectives of this organization: θ Leverage the franchise θ Intensify the development of non-apparel sector θ Accelerate growth in retail θ Investing in under-exploited markets θ Pursue operational excellence Historically, Burberry has been highly decentralized. In 2007/2008, the company continued to integrate and simplify the structure and process by creating a more effective and efficient model. Overall: Burberry continues to increase and strengthen the core functions within the supply chain (control and quality assurance, distribution, customer service), design and acquisition. [...]
[...] Clothing still accounts for 62% of sales for women's ready-to-wear and 27% for men's ready-to-wear." For its expansion of operations, the Burberry brand initiated an intense diversification strategy that has been very successful. Burberry's creation of clothes can be classified into three parts: "Burberry Porsum", "Burberry London", "Thomas Burberry. Burberry Porsum covers products which will be unveiled at "Fashion Week", the second is dedicated to the iconic styles of the quintessential “British” brand and the latter is more focused on sportswear clothing. [...]
[...] Commercial portfolio 2004/2005 2005/2006 2006/2007 2007/2008/2009 (First half) 2007/2008 : The turnover for the company Burberry by product and destination in 2007/2008/2009 is illustrated above Regarding the distribution of sales, the channels adopted by the company include: θ The licensing θ Wholesale business θ Retail business Burberry registers more sales via franchise and retail business. In 2007/2008, we see that the wholesale and retail sector registered maximum growth; 20% for retail and 20% for wholesale. The present figures show that sales growth has been slowing down year to year. [...]
[...] Burberry's pricing strategy Burberry realizes the bulk of its sales from three major global regions: the United States, Europe, Asia and rest of the world. For Europe, all prices are quoted in pounds sterling, since it is the currency of the country of origin of the company. For all other regions of the world, prices are fixed in dollars. All prices are based on certain convertible currencies that buyers use.The company is therefore susceptible to fluctuations in currencies, primarily the dollar, the yen and the euro. [...]
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