Burberry’s Catwalk Comeback: Post-Brexit Prospects show “Enormous” Potential
Earlier this month the whole world witnessed the fashion frenzy that was London Fashion Week, and along with it, the revival of the quintessentially British brand: Burberry.
Over the past few years Burberry sales and profits were dipping, pre-tax profits of the British luxury fashion house fell 5% to £394.8m since 2016 reports due to below par wholesale trading in the US, and fell a total of 11% since its 2015 annual reports. See full reports here.
In 2015, company president and Chief Creative Officer Christopher Bailey took a 75% pay cut from £1.9m down from £7.5m the year before.
However, Bailey looks to the future of Burberry with enthusiastic optimism. Bailey hailed the potential for UK trade post-Brexit as “enormous” in a BBC program interview.
He continued to praise London as “an energy hub for the creative industries”, describing Britain to be a “creatively nourishing country that people want to feed off” that would continue to provide international interest in Burberry.
“The possibilities and the potential for growth, both locally here in the UK and overseas, is enormous.”
Bailey expressed his confidence in Burberry’s enduring performance through Brexit, adding that Burberry’s classic check scarves and trench coats will remain resilient in consumer popularity and that its “Britishness resonates globally”.
The internationally enduring allure of British style and Burberry was especially evident with the fall in sterling due to the Brexit vote. Burberry has been taking advantage of the weakened pound, and has recently been improving in performance with tourists, mostly from China, who are flocking to buy their products more cheaply in the UK.
The luxury house has also been switching gears in marketing and consumer advertising. As seen in Burberry’s fashion shows last week in London, an increased focus on a see now, buy now collection model in addition to a boost in Asian influencer recruitments, all became much heavier parts of the company’s marketing agenda.
The company publicly announced that their fashion shows will no longer unveil clothes six months before they are physically available in stores. As of this year, Burberry ad campaigns will only reflect their immediate runway offerings.
The surge in Burberry’s celebrity brand ambassadors and Asian influencers also plan to engage millions of their followers, opening up to a new, younger generation of customers. Currently the Far East accumulates to 40% of Burberry’s current sales, and a boost in Asian influencer endorsements could help maintain their presence and performance in Asia.
Bailey had looked to improve Burberry’s performance in Brexit through the development of a stronger focus on social media and public influencers as marketing platforms.
Bailey describes Burberry’s recent marketing media modifications as changes that “ will allow [Burberry] to build a closer connection between the experience that we create with our runway shows and the moment when people can physically explore the collections for themselves. […] From livestreams to ordering straight from the runway to live social media campaigns, this is the latest step in a creative process that will continue to evolve.”
In terms of recent figures, the Burberry group has been showing palpable improvements. Earlier in July Burberry exceeded analyst expectations, posting a 3pc rise in retail revenues, and achieving a reaffirmed rating as the target price of the Burberry Group PLC (BRBY) raised 14% from GBX 1,495 ($20.10) to GBX 1,748 ($23.51). The Commodity Channel Index (CCI) of Burberry Group PLC is also currently sitting at 132.51, indicating an increase in buying and general action for the British fashion company.
