Does Burberry Take All The Chinese Agency Rights To The Chinese Market?

Burberry, the British luxury group, recently announced the withdrawal of the remaining 15% of the company's dealership from Chinese dealers by 54 million pounds (470 million yuan).

In this regard, Sparkle Roll Holdings, a Burberry classic product that had been introduced into the mainland of China, was formally withdrawn from the classic products of Hongkong, such as scarves and windbreaks.

In fact, the Burberry group has been tightening since 2010.

The agency has repurchased 50 Chinese stores and their management rights in cash of 70 million pounds (about 615 million yuan).

Angela Ahrendts, the chief executive of the time group, made the first attempt to unify the global image while strengthening Burberry.

Exposure is the key to grasping the dominant position in key markets.

The London based group predicted that the takeover would help to raise operating profit by 20 million pounds (about 176 million yuan).

Aiming at China's emerging consumer class Burberry, it even plans to double the number of Chinese stores.

However, after five years, China's "heavy asset" allocation has become the constraint of the group in the downturn of the luxury goods industry.

Liberum investment bank analysts believe that Burberry group is "too dependent".

40% of the revenue comes from Chinese consumers.

The slowdown in China's economy, the campaign against corruption and corruption in Hongkong and the turmoil in Central China have a negative impact on the sales of stores in mainland China and Hongkong.

The 2016 earnings report released in May showed that the annual revenue fell by 1% compared with the previous year, and the adjusted pre tax profit was 421 million pounds (about 3 billion 700 million yuan), which shrank by 10% compared to the same period last year.

In order to save sales, Burberry has made drastic reforms, such as publishing interactive content and behind the scenes stories on WeChat platform before and after the fashion show, merging all the sub lines, showing people in a unified brand image, launching the first show, and replacing all the shop windows and advertisements at the moment of T curtain opening.

In addition, group creative director and CEO Christopher Bailey has been cut off the annual salary of 3/4.

Just a few weeks ago, he was relieved of CEO and replaced by Marco Gobbetti, chairman and chief executive officer of former C line.

In the past year, Burberry has reduced its total cost by 25 million pounds (about 220 million yuan) by reducing employee bonus, stock incentive, unified product line, and men's and women's show.

However, Burberry apparently did not attribute the poor sales to the Chinese market.

In the 2016 financial report, the British luxury group said that future market opportunities are mainly located in China, Japan and the tourism market.

Burberry will continue to optimize Chinese stores and open three new stores, focusing on Beijing, China's best market in Burberry.