by Stephanie Wu
The Burberry Business Model: Creating an International Luxury Fashion Brand
Creating an International luxury brand starts with the right decisions made by those who manage the company. Thomas Burberry, who sold men’s outerwear in England, founded Burberry in 1856. The break through for the company was upon the development of “gabardine” fabrics which resisted tearing and was weatherproof as well as breathable. Associated with the military because of the material, the “trench coat” was developed and Burberry evolved into a retail and wholesale business. Working its way through, the first store in London opened in 1891 gradually expanding then in to the foreign market until we now know as the present day ‘Burberry’.
Decline and Survival
With that being said, Burberry entered a state of shock in 1997 as their annual profits dropped. Their problems read: heavy reliance upon a small base of core products company-owned retail network based in non-strategic locations inconsistent Burberry products sold in wide range of retail environments of varying quality inconsistencies in price, design, quality control across markets under-investment (refusing to make low-risk investments but projects may not perform as expected resulting in bankruptcy) in corporate organization in relation to marketing, merchandising, product development and other support functions. A new appointed chief executive, Rose Marie Bravo, managed to change Burberry for the better and re organized it.
The Management team understanding the importance of brand strategy takes the original name “Burberry’s” and changes it to “Burberry”. Along with that change, they created a new brand logo as well as a contemporary packaging. In order for them to slightly change the perceptions of Burberry, they, incorporating with that strategy, used models such as Kate moss and renowned fashion photographers to promote their British theme in advertisements. They also repositioned their locations as a flagship store (retailers designed to serve mainstream customers placing them in upscale areas) near Gucci, Versace, Prada, Chanel, YSL, and Bulgari on New Bond Street in London as an act of attracting international fashion press and other media attention.
Product Design and Sourcing
Christopher Bailey, whom had extensive knowledge of fashion houses such as Gucci and Donna Karan launched Burberry Prorsum with a design team where Burberry would be able to compete in high fashion with its counterparts. They also reduced its reliance on licensees for product design and manufacture.
The Burberry old garde and the new together in 2002 by Mario Testino
Defining the Burberry Business Model
Burberry has established a multi-level brand strategy:
Burberry Prorsum, which is the couture fashion range that merely, serves to attract mass media. Quantities are limited and are exclusive for well-off customers. The range is in prestigious departments such as Barneys in New York and Harvey Nichols in London. Burberry London Line is the prête-à-porté range in collections of spring/summer and autumn/winter both men and women’s wear. Spanish and Japanese have two separate lines from Burberry due to the fact that Burberry has established a relationship with them in the past. Both the Spanish and Japanese market has the more tailored Burberry London range for strong classical elements. The Thomas Burberry range in Spain that is targeted at a younger age range from 15-25 years. The Burberry Blue and Burberry Black brands sold only in Japan include the former a casual collection and the latter tailored clothing with sportswear. Burberry along with clothes produce Fragrance, accessories, and children’s wear.
Burberry has retail chain stores in important locations in London, New York, Barcelona, and Tokyo with full stocks of Burberry prorsum and Burberry London ranges with accessory collections.
Department stores creates a cost-efficient manner in order to avoid risks and costs with operating a large number of company owned stores. Outlets sell surplus stock at retail stores and wholesale.
Burberry's ads no longer feature the older generation by 2008 above and 2009 below
Brand strategy is combined with brand positioning to increase brand equity or value in both the eyes of the consumer and the bottom line.
International Luxury Goods Merchant: Arthur Cooke
Responsible for Henry Cotton’s and Linen company Frette, for image merchandising, product development, store visuals, and advertising)
“Our plan is to make the brands collective images synonymous with fashion and luxury”
Dawn Mello of Bergdorf Goodman discovered Cooke. He worked at Bergdorf and liked to choose accessories and shaped looks for seasons. Eventually in a few years working at Bergdorf, he was promoted to vice president and eventually came to his position at Henry Cotton’s and Frette in which he oversees showrooms for the sportswear company.
Fashion’s Foremost Empire Builder: Bernard Arnault
Chairman of LVMH- Moet Hennessy Louis Vuitton
“The strongest factor in luxury brand building is the boutique.”
Arnault resurrected the Dior label as one of the bankrupt companies in Bossac 1984. He owns over fifty luxury brands including Dior and Fendi. He believes that the boutique is where the brand is alive.
Brand Builder for Famous Names: Jean-Marc Loubier
CEO of Escada
For 16 years, he worked at LVMH under Arnault. He revolutionized the Louis Vuitton image by using the company’s old history to turn what lacked freshness into a fashion and innovative product with the signature monogramming.
Fashion and Media Matchmakers: Karine and Ariel Ohana
Managing Partners in Ohana & Co., a boutique mergers-and-acquisitions firms. The Brother and sister formed their company in 1994 that focused on merging technology, and luxury. They work to bring smaller companies together with larger enterprises that have the nessessary alignment of finaltion assets for fashion. An example as such is how Emanuel Ungaro became part of Ferragamo.
Repositioner of Global Brand: Scott Fellows
Former Creative Director of Bally
“We will combine traditional Swiss precision and old-world craftsmanship with modern shapes and designs.”
Has a business degree from Harvard and had attempted to steer Ferragamo, Gucci, Prada, and Fendi however, settled with Bally with its alpine-style roots. He refocused the company’s strategy and downsized the retail network of Bally due to its problematic turn around and made it successful in changing the image but also to retained the Swiss feel.