Why Should Burberry Cut Off The Secondary Line Brand And Survive In Winter?

In the global luxury market slowdown and brand performance growth is not expected, the British luxury brand Burberry is undergoing a new round of product strategy changes.

Burberry, the old British brand established in 1856, has a number of sub brands. These sub brands with different positioning have created 70% of the group's sales during the expansion period.

Today, Europe's economic downturn and recovery are slow. China's massive anti-corruption efforts, coupled with the cautious expectations of the new class under the new normal, have made the achievements of these top international luxury brands hit hard.

The regular survival strategy in winter is to reduce physical energy consumption, cut off the business lines that scatter resources and energy, and concentrate on returning to the operation of the main brand in order to get a quick recovery in the next economic growth period.

In winter, you do not want to reduce the amount of exercise, hibernate like a snake, or have a cotton coat that is enough for winter, go out and look for food like a polar bear, but can not be immersed in the harvest of summer flowers and autumn harvest.

Burberry CEO and creative director Christopher Bailey (Christopher Bailey) has announced that its three major brands Burberry Prorsum, Burberry London and Burberry Brit will gradually withdraw from the stage of history before the end of 2016, and all product categories will be unified into a single "Burberry" main brand.

This means that the product strategy adopted by Burberry former CEO Rose Marie Bravo era has ended.

Luxury industry insiders told the "First Financial Daily" reporter that Burberry cut off the sub line brand, which is related to the change of the luxury business mode in the new situation and the strategic change of Burberry market.

"This plan is designed to meet the needs of the market."

Bailey said in a public statement about the reasons for cutting off the sub line brands, "the establishment of a subordinate line was due to the dependence of Burberry on wholesale channel sales. However, for the sake of the current very different considerations, Burberry regards brand consistency as the top priority."

As the main line, the luxury brand Marc Jacobs contributed 70% of the sales of the sub brand Marc by Marc Jacobs, also in March 2015 after the merger with the main line.

Another US luxury brand Marc Jacobs confirmed that the sub line Marc by Marc Jacobs was merged into the main line brand Marc Jacobs.

Her CEO Sebastian Sur (Sebastian Suhl) said so when announcing the decision.

There are two reasons: first, whether it's high end or low end, high priority or close to the people, people are shopping online today. Why should we distinguish products? Secondly, consumers will always be confused by different names.

D&G, a subsidiary line brand of Italy luxury brand Dolce&Gabbana, reached 400 million euros in 2011 (about 2 billion 680 million yuan), or even over Dolce&Gabbana.

The two founders of Dolce&Gabbana are also reluctant to shut down the sub line brands to maintain the main line of brand spirit.

These 70% categories of sales were created in the wholesale channel, while the retail channel contributed 30% of the sales volume. These categories were created, but now the market share of front-end retail has become larger and brand consistency has become more critical.

Bailey said, "there will still be all kinds of products like today, but they will be called Burberry, a unified and consistent luxury brand.

We believe that this will make the brand more intuitive and easy to understand.

We are confident that this will make the operation of the company more efficient and productive. "

The new brand named Burberry will focus on the British roots of the company and emphasize its design and development in London.

Bailey also said: "we believe that this will provide our customers with a more concise and intuitive image.

This is not just a facade, but a great change. "

Zhou Ting, President of the Institute of wealth and quality, told reporters: "the luxury consumption group is not very large. Luxury brands may need to meet the needs of different consumer groups through different sub line brands. But now there are three new situations, so that luxury brands have to consider the significance of the secondary line."

The first is general.

The positioning and price are lower than those of the main brand, but the design will be more similar, and some vice lines will grow fast or even lower the brand to form a dilution of brand value; second, now.

Consumers are more extensive, the sub line brands can not carry out the market segmentation very much. Instead, because the secondary line brands need to be built separately, production and operation need to be carried out separately, they may cause more cost pressures to the brand. Third, more luxury brands see the trend of the electricity supplier, and the social media of the electronic business has given consumers more global perspective. The complicated sub license card classification has no more significance.

In fact, the above three conditions are also reflected in the fact that in recent years, many luxury brands have adopted similar product strategy adjustments.

In the first half of 2015, light luxury brand Kate Spade gradually closed down.

Kate Spade Saturday's 19 stores and men's wear brand Jack Spade's 12 stores.

In the fourth quarter of 2014, net income of the two brands dropped to $126 million 500 thousand, compared with $185 million 200 thousand a year earlier.

Its competitor, Michael Kors, had previously withdrawn its Kors by Michael Kors, a lower price line, because its existence would cause consumers to worry about the location of the main line and the sub line, thereby affecting the overall image of the brand.