Can Burberry Get Consumers Back?

According to the world clothing shoes and hats net, the first CEO Marco Gobbetti came to power for the first time.

The fashion show has just been released in London Fashion week.

Returning to the UK and opening up with more stars, is it possible to buy more than a quarter of Burberry to get consumers back?

Unlike the previous season's claims on technology, the newly released Burberry 2017 September series occupied the coverage of the major media with the regression of the British grid.

Over the past time, Burberry has tried to weaken the design elements of grid, in order to prevent excessive abuse.

Image and grid are over related, thus forming brand stereotype.

Especially when millennial consumers become potential consumers, they are not very interested in the once popular logo and old flower bags, and prefer the design of real personality.

At the press conference of at least two seasons in the past, Burberry built the Makers House craftsman's house around the craftsman's craft theme, with a view to strengthening the image of an old brand.

The T stage is full of ornaments made of complex technology.

In April of this year, the "British shawl Fantasia" Gao Ding shawl tour was held in Shanghai.

To the industry's surprise, the classic brand was honored in the September 2017 show, but another street style baseball cap and lattice size handbag broke the image of the past few seasons.

Attending the Burberry show, MINO and HOONY in the Korean star WINNER combination have attracted the attention of foreign media, which means that the Burberry group will continue to increase the trend star strategy, so that the old British brands will be further younger.

Burberry's invitation to South Korean stars is also considered to compete with LVMH group and Chanel group for Korean star resources.

Because LVMH group has always favored the Korean wave star, and recently invested in the Korean eyewear brand Gentle Monster, Chanel has an advertising relationship with Bigbang member GD Zhi long.

Wu Yifan and Chinese actress Dongyu Zhou also appeared in the front row. The former cooperation with Burberry has helped the brand to prove the ability of the trend star to stimulate the brand performance.

The new product strategy and promotion strategy officially announced the British veteran's attempt to break through.

Although creative trader is Christopher Bailey, the situation is quite different now.

In July this year, Marco Gobbetti from Celine took over CEO in advance, while Christopher Bailey focused on creativity.

During the half year interim period before July this year, Marco Gobbetti acted as interim executive chairman of Asia.

According to Bloomberg report, Christopher Bailey has proposed to the board of directors for business assistance since 2015. "For me, the title of CEO is not a major decision."

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In the past few years, Bailey has been unable to take account of group business and creativity. In fact, Burberry's performance in the past few years has not been optimistic. According to the fashion headline data, Burberry profits have declined for 3 consecutive years.

In the first quarter of June, sales of Burberry (LON:BRBY) increased by 3% to 478 million, an increase of 4% over sales.

Among them, thanks to the strong growth of mainland China's performance, the Asia Pacific region has achieved the growth of median digits, while the performance of the brand in the UK has also shown a positive growth trend, pushing up the high single digit growth in Europe, the Middle East, India and Africa (EMEIA).

Looking at the full year data of the last fiscal year, the weakness of the pound did not save Burberry's performance. According to the 2016/17 financial year's annual earnings report released by the brand, its sales and profits recorded a drop in real exchange rate.

In the 12 months ended March 31st, Burberry sales increased by 10.4% to 2 billion 770 million at fixed exchange rates, down 2% from real exchange rates, and adjusted pre tax profits increased by 10% at fixed exchange rates, while real exchange rates fell 21% to 462 million pounds.

Last year, Burberry closed 32 stores.

According to the latest news of Daily mail, Burberry's new CEO Marco Gobbetti is now visiting its 498 retail stores in the world according to its plan to determine which stores need to be adjusted or closed.

According to sources, at present, 74 stores in the United States have been classified into the category of Customs stores by Marco Gobbetti.

It is reported that Marco Gobbetti, 57, used to serve CEO at Celine. In his term of office, he closed more Celine stores than new stores, preferring to sacrifice short-term sales to protect and upgrade its brand image, focusing on the sustainable development potential of brand stores.

Some analysts believe that although the brand is constantly launched, that is to say, buy new ways to stimulate performance, and through the trend of young stars such as Wu Yifan, but all kinds of incentives do not bring a stronger driving force for growth.

Ultimately, consumers still pay for the products themselves.

It is noteworthy that leather goods and shoe accessories department account for 40% of Burberry sales revenue. According to the fashion headline data, the sales volume of 2016/2017 in the first half fiscal year increased by 8% to 426 million pounds, and the sales volume of the Department still fell 1% without considering the depreciation of the pound.

In the performance dilemma, Burberry also began to guard against brand unattractive products.

Some analysts have pointed out that the introduction of fresh talent will become the key to Burberry's competitiveness in the luxury market.

Dior Sabrina Bonesi, chief designer of the original lady leather, has joined Burberry as director of leather and footwear design. This position is a new position, mainly responsible for the design of brand handbags, shoes and accessories for women and men. She reports directly to Burberry president and creative director Christopher Bailey.

Prior to that, Sabrina Bonesi also served in Prada, Bottega Veneta and other brands.

In addition, Christopher Bailey in January 2017 invited its former partner Net-a-porter Claudia Plant to appoint it as the new senior vice president of the group.

He also led the sales director, Judy Collinson, to his command.

Burberry has realized that no core handbag products will be difficult to compete with other luxury brands. After reviewing and adjusting the past performance, the sales of handbags products are the most obvious. From March 2016 to September 30th, Rucksack, Bridle and New Buckle three handbags of Burberry have become popular products.

In particular, this year's Burberry heavy launch of DK88 has become a performance Savior. From the current market feedback, this handbag has become one of the latest star products of Burberry.

In a report released last May by UBS UBS, the price of handbags Burberry was about 14% lower than that of the same luxury handbags. It is believed that Burberry still has room to raise prices in this category. Christopher Bailey also stressed that the group's future business will be greatly enhanced.

In an interview, Christopher Bailey also revealed that Burberry has a high degree of dependence on Chinese consumers. In order to stimulate the sales growth of handbags in the region, the group hired young Chinese idol Wu Yifan as spokesperson for the brand last year, while making full use of the influence of young idols to promote the brand while concentrating on developing potential commodities.

In view of the global consumer demand for luxury goods and the reduction in the volume of shopping malls, Christopher Bailey has proposed a fiscal tightening plan in May last year, including streamlining the number of bad stores and cutting the number of products. It is expected to save 100 million of the operating expenses by 2019.

However, according to the financial times, at present, shareholders of the company are dissatisfied with the excessive salary of Burberry management.

Although Burberry said it would make concessions, the shareholder advisory organization ISS still advises clients to vote against Burberry's pay report at the AGM next month.

It happened that the Burberry board decided to issue millions of pounds of share dividends to the outgoing chief executive, Christopher Bailey, and the award of the new chief financial officer earlier.

Fortunately, Burberry is conquering young people through the right product strategy.

The view of Burberry in capital market is also improving.

At the end of last year to the beginning of the year, Burberry had been frequently heard about mergers and acquisitions.

Last October, financial blog Betaville quoted two sources as saying that the us light luxury brand Coach (NYSE:COH) considered merging with the British interbank Burberry, and Coach and its financial advisor Evercore have studied potential buyout deals.

However, a British newspaper reported in December last year that Burberry has rejected Coach's merger and acquisition, and if the two are combined, it is expected to become a new luxury giant with a market value of nearly $20 billion.

However, in early March, LVMH's independent director, 91 year old Belgium's richest man, bought the Burberry 3% stake, intending to push forward the brand reform in a big way, and proved the confidence of the capital market in Burberry.

The industry speculated that Albert Frere will carry out a series of reform measures to enhance the profits of Burberry in the future.

It is reported that Albert Frere has been the business partner of Bernard Arnault, chairman of the board of directors of LVMH, a luxury group in France.

In the past year, Burberry's stock price has increased by 31.93%, and its market value is about 7 billion 744 million.

However, the new chapter of the brand is not a smooth road. The future of Burberry may still experience turbulence. The chairman of the board John Peace has decided to leave the company earlier, and no successor has been found yet.

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