Analysis Of Burberry And Other Luxury Goods Entering China To Cancel The Agent And Go Straight To Camp.

In July 17th, Britain's largest

At present, Burberry has 50 franchise stores in 30 cities in the mainland.

According to its plan for the 2010-2011 fiscal year, Burberry will open 10 new stores in the financial year, all of which are direct battalions.

Before Burberry, many international brands such as Zegna (Ermenegildo Zegna), MontBlanc (Montblanc), RalphLauren and so on have successively recovered their proxy in the Chinese market and turned to the direct mode.

Under the pressure of public opinion such as "breaking up the door" and "crossing the river and removing the bridge", agents' shouting "survival crisis" failed to change the major brands' luxury brands.

"Burberry is not willing to share profits with others."

19, a luxury.

Peaceful breakup

Kwok Hang Holdings is a senior in Hongkong.

Burberry's chief financial officer, Stacey Cartwright, said on the phone that this was not an easy negotiation, and it took both parties a long time to find a consensus.

Shops and brands were originally owned by Kwok Hang Holdings and Burberry, so shops were the focus of negotiations.

Under the new cooperation agreement, Burberry will invest 70 million pounds in cash to purchase 50 KwokHangHoldings stores in the mainland and 85% of the company's shares.

All pactions are expected to be completed in autumn.

In the future, Burberry will be fully responsible for the operation and management of the mainland stores.

"In the future, we will intensify our efforts to open stores and speed up the development of online shopping market.

The current Chinese market is a good opportunity for further development.

Burberry CEO Ahrendts explains Burberry's future in China.

Direct camp Era

The world's enthusiasm and expectations for China's luxury goods market are rising.

In May this year, the Chinese Academy of Social Sciences said that in the next 5 years, China's luxury market will be worth $14 billion 600 million, ranking first in the world.

Boston consulting firm expects that China will account for 29% of the global luxury market share in 5~7 years.

An international brand dealer said.

The consumption power of this market is constantly released, and the brand's final understanding of the market has come to an end. That's why so many brands want to kick off agents.

At present, brands such as Zegna, Armani, Rolfe rolun, MontBlanc and TommyHilfiger, which originally relied on agents to open up China channels, have already started to operate directly.

In this regard, MontBlanc and its agent, Credit Suisse's "break up" is particularly unpleasant, and the claims and disputes between the two sides have not yet been achieved.

Luxury brands often look for agents to open their way, and then recover their dealership after the market size is formed.

For Burberry, it is actively seeking partners in the India market and developing the market by way of franchising or joint venture. This is exactly the way Burberry first came to the Chinese market.

If the sales channel of agents is too strong, brand operators will gradually lose control and derive many grey areas.

Therefore, in every luxury brand Summit Forum, every brand is concerned about the control of agents.

"Another reason is profit," said the dealer. "The profits between brands and agents are proportionately shared. Since we have already opened the market for ourselves, why should we divide the bowl of soup into others?"

By December 2009, in the 2009-2010 fiscal year, the revenue of KwokHangHoldings Chinese franchises was 75 million, and the profit was 14 million.

Cartwright did not disclose the profit sharing ratio. She emphasized that profits in China grow by two digits every year.