Turning Salted Fish Into Luxury, The Success Of British Brand Burberry

Luxury in English tradition brand Burberry entered the sixth annual "BrandZ global most valuable brand 100" list released in May this year. Luxury goods Category ten list. 14 years ago, the prospect of the Brand Company was in a daze. After a series of measures, it finally passed the hardships smoothly. period We are heading for a new journey. How far has the brand gone and how much growth potential is there? What kind of difficulties will it encounter on the way?

14 years ago, boboley was almost turned into a ranch. The prospect was a mess. Its trademark was stuck on the cake box, napkin and apron. Bo Bailey invited an American woman named Ross Mary Bravo (Rose-Marie Bravo) as reinforcements and became their chief executive, hoping for salted fish to turn over. Ross Mary Bravo began to take over Bob Bailey and let Bob Li walk into the door of luxury brands along the way of rapper Michigoue. Despite the fact that Ross and Mary Bravo managed to stabilize Bo Bailey in her 9 years of office, laying the foundation for her next management and constantly breaking through the market expectations, her management team still has no confidence in whether to build Bobo Lee as an excellent luxury brand.

The next stage was led by Angela Arend (Angela Ahrendts), who joined bolbury in 2006. From the beginning of her takeover, Boboli has jumped to the top of the luxury assessment list, which has doubled its turnover and market capital to 1 billion 500 million pounds and 5 billion 800 million pounds respectively, which is two times the LVMH group's turnover and market capital growth rate over the same period.

Recent sales figures show a 27% increase in revenue and a 37% increase in operating profit. However, the initial market benign reaction began to weaken, because the company foresaw that its flagship stores need more investment, so the profit growth in the short term will be affected.

Moderate adjustment of brand structure

The correct definition of brand organization is that it is the foundation of establishing brand business. In the case of shops, the foundation of a brand is sometimes increasing so as to adapt to the new market or demand. The final result is that a bunch of brands and sub line brands do not share the same clue. Originally, they tried to attract all of them. This is the dilemma of bobury 14 years ago. The task of dredging is arduous. It is necessary to terminate licensing sales (sales of licensed products from 32 in 1998 to 3 in 2011), close wholesale businesses, redefine retail channels and locate brands, and phase out the sub line brands that are inconsistent with overall development in the company's strategic position (though there are surplus), although these brands have also entered the most important strategic markets of the company, such as Japan and Spain.

Boboley now has 3 main sub line brands: Prorsum, London and Brit (including Burberry Sport). Prorsum has been developing well over the past 10 years. Anna Winter first participated in the Prorsum fashion show in 2009, when the fashion show's address moved from Milan to London. London and Brit are reaping profits, which have become the main driving force for sales and profit growth of bobury, and the scale of Brit is likely to exceed London. As long as people look at Armani Jeans, they can know the growth potential of Brit.

Strengthen digital communication with customers

Boboli believes that the best way to get close to customers outside the store is electronic media. The coverage of the company's electronic strategy is far greater than that of its main customers. Boboli, who has as many as 5 million fans, is the most popular luxury brand on Facebook. Last year it had 4 million channels of browsing on YouTube, and its network trenches art is always so attractive. In addition, it also appears on a large number of international and British Internet sites, such as Twitter, Sina micro-blog, Kaixin, watercress and Youku. The company has increased investment in websites, now has 6 languages, and 45 countries can sign up. Although it has been very difficult at the beginning (slow and difficult), its website has made some progress.

The company's new stores are also filled with digital images, such as digital walls or digital screens, and sales staff have iPad phones that enable them to take charge of all products. This is to make the brand deepen the impact on today's and tomorrow's luxury customers.

Actively developing multiple product categories

Facts have proved that Boboli's coat image is its solid foundation, but it is not easy to become a fully mature brand that can be worn to customers at any time. Its clothing sales still occupy more than half of the main clothing sales, mainly women's clothing. In recent years, men's clothing has entered into indoor clothing and sportswear completely. It is believed that there will be growth immediately. These two kinds of clothing make the brand easy to change from the product structure dominated by outer garments. Although the growth of "fashion" supply is more difficult under the credibility of Prorsum, there is no doubt that customers will eventually be found, especially in promising emerging markets.

Boboli has achieved solid growth in the non fashion sector (mainly leather goods). Its average annual growth rate has been close to 20% since 2001 and now accounts for 44% of wholesale and retail revenue. The company now wants to rely on small leather goods and leather shoes for further growth. Other areas of interest include children's wear, make-up and home accessories. Because the brand is tough, these products will definitely have customers, but the type of products that can be thought of has been fully occupied. Now the company is going to challenge risks in the category of products that are not sure.

Redistribution of sales

Over the past 10 years, boboley's retail business has been the main driving force for the company's extraordinary growth. In 2001, the company had 54 Direct stores, including 1 flagship stores, 30 main line brand stores, 6 concessionary merchandise retail outlets and 17 consignment outlets. In 2011, the number of outlets increased to an incredible 417, including 174 main brand stores (including flagship stores), 199 concessionary merchandise retail outlets and 44 consignment outlets. This transformation is partly due to the shift from franchise or wholesale sales to direct retail, mainly in Spain, South Korea, China, Taiwan and Mainland China, and also because of new investment locations, mainly in the fashion cities of the United States and Europe. Direct battalion is the main distribution channel at present, which is consistent with other major luxury brands.

In addition, in order to achieve retail growth, bolberry has become a better retailer: Sales density has risen from 597 pounds per square foot in 2001 to nearly 1000 pounds per square foot in 2011. The driving force of growth is the improvement of product mix and sales planning, as well as the timely replenishment of goods. However, for a luxury retailer, this is only a modest performance. The company is aware that there is still much work to be done to improve retail experience. The company announced that it had a major flagship store renovation project in the financial year.

Geographically balanced investment

Boboli has been doing business in Japan, Spain and the United Kingdom from the very beginning. Until now, it has become a complete international brand by balancing the geographical investment. One of the main strategic driving force of the company is to invest in the market that has not yet penetrated thoroughly, including the developed markets such as the United States and emerging markets such as China, India and the Middle East. The store opened in China (reaching 50 in July 2010) is in line with its luxury pioneer position, and plans to double the number of stores in the most important market in the next 10 years. The United States still represents important opportunities for Boboli, as well as the Middle East and India, and Burberry's store plan is still in the early stages.

Update and strengthen operation system

Boboli has invested a lot of money and time to increase operations, supply chains and IT systems. Its investment strategy includes reconstructing London headquarters into a well used building and arranging all the company's teams for the first time. It also converted a large number of IT network streamlines into a separate global network, and launched a satellite automatic control system covering the whole world (excluding China). Boboli also strengthened its relationship with suppliers and strengthened logistics management. The impact of this investment can be felt in all business areas: store direct sales data can enable companies to respond immediately, replenish the areas of good sales; let sales planning and design teams work under the same roof to strengthen cooperation between the two functional blocks; the supply chain of the streamlined supply will not only save expenses, but also shorten the time to enter the market. In a word, in the field of retail practice in England, Boboli is the first. It introduces fast fundraising and achieves the simultaneous dissemination of information on new products and worst sellers in every store and website.

Bold change to create value

Boboli, a luxury company that has changed from licensing sales to vertically integrated management, is paying a lot. Transformation requires a lot of investment: investment is to build the infrastructure needed; capital expenditure investment is to control retail assets and permit sales (although most licensing sales can be terminated rather than buyout) or in order to fully expand the outlets. It has to be said that it is a bit like giving up drugs, and allowing sales revenue to eventually be disadvantageous to a luxury brand, but it is difficult and painful to throw away this burden, just like someone has to turn off a stable and effortless source of income. According to the information available to the public, we found that from 2001 to 2011, the transformation of Burberry has cost nearly 830 million pounds, and does not include the depreciation of the credit value of 116 million pounds which closed the Spanish business in 2009 (if the indirect cost of indirect operation is not considered, the total value may be close to 1 billion pounds). Of course, it turned out to be worth it: in this section, Bo Boli's revenue increased by 1 billion, operating profit increased by 4 times, and market capital increased by 4 billion 700 million. Unlike the transformation of other famous brands, such as Gucci and Boboli, the transformation was carried out under the supervision of the public. It did not depend on the annual cash flow of the company, but still maintained a profit growth (except for 2009).

The road ahead is full of challenges.

Boboley's management team did not let the brand go too far, which is commendable. Operation, brand building and customer communication are the most important in brand management. The company has made great progress in product structure, and has now balanced the proportion of regional sales, retail and wholesale. There is no doubt that the company is now a luxury business. Undoubtedly, over the past 10 years, with the company's recovery of licensed sales and the development of retailing, the overall growth of boboley has exceeded the growth of the industry. This requires a lot of technology, hard work and investment, but the fruit hanging down has been taken off. The road ahead is full of challenges. It is not yet clear that Boboli already has the advantage of LVMH (LVMH is now fully accelerating) unless Boboli wins the advantage over LVMH through acquisitions. As Bvlgari's recent acquisition shows, the acquisition of large luxury assets will not exceed the odds.