British Luxury Brand Boboli Has Recovered The Remaining 15% Agency Rights In China.

Britain Luxury brand burberry (Burberry) the remaining 15% agency rights have been withdrawn in China to achieve 100% holding, and will take part in the Chinese market in the 40% share of the group. According to the insiders, the agent will directly enter the Chinese market in the long run, and Burberry will face the huge Chinese market alone in the downturn of the luxury goods industry. In such a "heavy asset" mode, the brand should be in the "heavy asset" mode. Design There are breakthroughs in marketing and marketing.

Heavy assets operation

Burberry recently acquired a total of 54 million pounds (about 477 million yuan) to acquire the remaining 15% shares of the Chinese agent, Hongkong Yao Lai Group, and will hold 100% of China's regional business after the completion of the spanaction. The recovery of proxy also means that Yao Lai Group has completely withdrawn.

Reporters learned that the Burberry group began to gradually reclaim the agency in China since 2010. It bought 70 million Burberry (615 million yuan) to acquire the 85% franchise of the franchising partner group limited in the Chinese mainland market. After the completion of the acquisition, the group fully supervised the development and operation of the sales chain, freight supply and network market. At that time, Burberry brand director once said that the right to recall the agent would maintain brand image and help to expand the Chinese market rapidly. Burberry has also begun to fight against counterfeit goods.

Burberry does not hesitate to invest heavily in heavy asset operations, hoping to produce a scale effect and share a share of the market dividend, but the Chinese market, which accounts for 40% of the sales, is not good in recent years. Statistics show that in the 2009-2010 fiscal year, the mainland China franchise business income was 75 million pounds, the profit was 14 million pounds, the brand in China's profit increased by two figures. In recent two years, brand profits have fallen continuously. Burberry's latest annual results show a revenue of 2 billion 400 million, down 1% from a year ago. Adjusted pre tax profit of 421 million, down 10% compared to the same period last year. In Hong Kong and Macao, the mainland market has only gained positive growth. The group also announced that profits in 2017 would be at the lowest level expected.

Burn the bridge after crossing it?

It is understood that Burberry had hoped to enhance brand positioning through Yao Lai Group, introduce high-end series, and get rid of the "grid" image of "rotten Street", but was rejected by the Yao Lai Group on the grounds of "hard to be accepted by consumers", resulting in the termination of the contract.

Burberry's action to get rid of the agent has been interpreted by some people as a diversion, but many luxury goods industry experts say this is an inevitable choice.

Zhou Ting, director of the luxury goods field and President of the Institute of wealth quality, said that the right to withdraw agency is not related to the quality of the market, and that foreign brands entering the target market must go through this process. Yang Dayun, President of the International Fashion Management Group, believes that when international brands enter China in early stage, they will expand their market by using agents to reduce risks. When the Chinese luxury market shrinks, the brand expands rapidly, and the fame and influence reach a certain scale, the multinational companies will choose to return to the direct camp.

As for the operating pressure under the "heavy assets" mode, Yang Dayun said that in a short period of time, the cost of brand operation and advertising costs will increase, but the long-term layout, upgrading and spanformation will be able to regain new growth opportunities. As Burberry is heavily dependent on the market, it is also a strategic consideration to change into a direct camp in China. Yang Dayun believes that the luxury market is in the doldrums, and the recovery price is lower at this time. It is understood that in the past two years, the international brands Hugo Boss, Jack Wolfskin, Michael Kors have all taken the right of agency in China.

Several struggles

Whether in the Chinese market brand positioning or group internal personnel management, Burberry has been adjusting and struggling in recent years. In mid July, Burberry's highly criticized chief executive, chief creative officer Christopher Bailey was demoted, and CEO will be replaced by Marco Gobbetti from the LVMH group. In the past two years, Bailey's performance has been poor, its share price has fallen by more than 20%, and its market value has evaporated nearly 1/5. In November last year, the group's complex product line integration and upgrading, its different prices of Prorsum, Brit and London three product lines merged and renamed Burberry and build a new windbreaker factory.

Analysts believe that in recent years, Burberry has a strong commercial atmosphere, and the design lacks originality, resulting in the loss of young consumer groups. Zhou Ting said that for brands, product innovation is a top priority. Yang believes that Burberry needs not only LOGO but also the Internet to make it easier for young consumers to accept. Burberry in brand promotion should aim at young consumers or even "two dimension" consumer groups. Brand is also expected to reduce product prices.

Reporters found that Burberry has increased innovation this year. Take the lead in implementing the "show show sale" mode, and increase the promotion efforts of WeChat and micro-blog in China, and select Wu Yifan and other popular artists.