Two years into Burberry’s turnaround under boss Marco Gobbetti
When Christopher Bailey announced his shock departure from Burberry after 17 years, Marco Gobbetti wasted no time in laying out his new vision for the British fashion brand.
Nine days after the announcement in October 2017, the newly installed chief executive revealed plans to take Burberry more upmarket, become a major player in the handbag sector and overhaul its store estate.
Delivering his proposals to the market, Gobbetti admitted Burberry had fallen behind its peers that were providing customers with “exciting” offers and enjoying strong growth.
“The strengths Burberry has built over the last decade give us a solid platform, but what drove our Designer Louis Vuitton Replica Handbags growth in the past is not necessarily what will fuel our future success,” he added.
But more than two years since Gobbetti unveiled his strategy, experts are still waiting for evidence that replica louis vuitton his plans are working.
Flavio Cereda, analyst at Jefferies, says Gobbetti inherited a difficult situation after former management overexpanded distribution and damaged Burberry’s perception among customers, particularly in the US and western Europe. “The strength of the brand equity was not great, it was a weakening brand profile to do with excessive distribution,” he says.
“So, too much stock, too much stuff in the wrong places often and very significant markdowns.”
Price reductions on Burberry’s products are still an issue, Cereda says. According to analysts at UBS, the TB logo handbag that launched in February 2019 sells on average at a 40pc discount to its retail price, much like Burberry’s older designs under Bailey.
“This in our view suggests the slow paced nature of the brand’s turnaround,” UBS analyst Zuzanna Pusz replica louis vuitton bags says.
In an effort to take greater control of pricing, Perfect Quality Louis Vuitton Replica Burberry is closing 38stores, equivalent to high quality designer replica handbags wholesale one in 10 worldwide, and focusing on improving and renovating stores where it will attract its desired clientele.
Bernstein analyst Luca Solca thinks Burberry should replica designer handbags go a step further with its store closure plan. “We continue to believe Burberry should be more aggressive in selling space contraction as the network remains excessive relative to the size of the brand in our view,” he says.
Burberry, which was founded in Basingstoke by high quality designer replica handbags Thomas Burberry in 1856 louis vuitton look alike bags www.dolabuy.su , is hoping a new creative direction by former Givenchy designer Riccardo Tisci will revive it.
Tisci was a surprise choice to succeed Bailey, with many industry commentators speculating that Burberry would opt for Phoebe Philo, who was known for her sleek, classic designs during her time at French fashion house Celine.
But analysts said that Tisci’s experience at Givenchy could be the ticket for Burberry as it looks to position itself more firmly as a luxury player. Tisci has also previously worked with Gobbetti, who headed Givenchy from 2004 to 2008.
So far cheap louis vuitton bags from china uk , Burberry says Tisci’s ranges have been received well among customers, such as the designer’s more casual streetwear designs sold through Instagram in 24 hour flash sales.
“Tisci was brought in to reignite consumer interest in a new Burberry aesthetic and he did indeed bring a fresh take on what Burberry could be in terms of product,” Solca says.
“Whether this is working or not is a matter of debate. There have been encouraging updates on how the new styles are doing, but on the other hand the overall like for like growth has only been starting to move moderately.”
Burberry notched up a 5pc rise in sales to 1.3bn in the six months to Sept 28 2019, while sales at stores open for more than a year edged up 4pc.
In order 1:1 replica handbags to pull off his strategy, Gobbetti will rely largely on building demand and maintaining loyalty among Chinese consumers.
As part of this, Burberry has struck a deal with Chinese technology group Tencent to develop a so called “social retail” concept in China, with the first store set to open in Shenzhen this year.
“At the moment the luxury market is driven entirely by the Chinese consumer, so that’s the name of the game,” Cereda says.
“In China, the Burberry brand profile is better than everywhere else because there’s less of a history of outlets, less of a history of discounting all over the place.”
One of the ways Burberry plans to improve how it is viewed among consumers is to make leather replica louis vuitton bags from china goods and handbags an integral part of its product range. The company wants 10pc of its total sales to come from leather goods in the future.
“Handbags are a source of prestige, a barometer of quality and creativity,” Judy Collinson, Burberry’s chief merchandising officer said when the group announced its strategy in 2017.
Some of the fake designer bags world’s most successful fashion houses such as Louis Vuitton, Chanel and Gucci cheap louis vuitton bags from china uk have thriving handbag businesses that bring in customers and provide a reliant stream of income.
This is an area where Burberry has struggled to compete, analysts say.
Burberry acquired Italian leather goods business CF in 2018, in an effort to bolster its leather goods division. CF which is made up of an all female team, has been working with Burberry to create its handbags for a number of years.
“In soft luxury, leather goods is what makes or breaks brands, it’s the go to category and it has always been the weakest point for Burberry,” Cereda says.
Solca adds: “Handbags are big ticket items. Much more so than clothing, you have much less discounting, youdon’t have sizes and you don’t have seasonality.