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Article: Why The Sales of Luxury Brand Burberry Were Up 18% In The First Quarter

Why The Sales of Luxury Brand Burberry First Quarter
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Why The Sales of Luxury Brand Burberry Were Up 18% In The First Quarter

British luxury fashion brand Burberry achieved an 18% increase in like-for-like store sales in the first quarter, thanks to a continued rebound in China.

According to Reuters reports, mainland China is for Burberry brand the biggest market. Here, the sales rose 46% in the 13 weeks ended July 1, reflecting the country's exit from Covid-19 restrictions.

America, however, remained a weak spot. Quarterly sales fell 8%, after a 7% decline in the previous quarter.

Why The Sales of Luxury Brand Burberry Were Up 18% In The First Quarter
Burberry trench coat (Photo credit: Youtube Screenshot)

Burberry in Europe

The company's financial statement also showed that sales in Europe rose 17%, buoyed by demand from tourists in the US and the Middle East.

"I think (demand from) the aspirational buyer has weakened a little bit ... but we're growing in the high-net-worth individual cohort ... who are buying products at higher prices for leather goods and outerwear," said interim CFO Ian Brimicombe.

He said more tourists appear to be returning to mainland Europe rather than London and that Burberry is pressing the British government for a new sales tax scheme to attract them.

The 167-year-old company, known for its trench coats, also reiterated its low double-digit revenue growth forecast for FY2024.

Leather Goods

CEO Jonathan Akeroyd said sales of outerwear and leather goods have performed well and that he is excited about new products from designer Daniel Lee, which will arrive in stores in September.

Lee, who joined the company in September, unveiled his debut collection at London Fashion Week in February.

Like-for-like sales of leather goods were up 13%, with women's bags, notably Frances and Burberry, performing well, the company said.

"Burberry is going through a quiet revolution at a time when other luxury brands, such as LVMH and Richemont, are consolidating their leadership positions," Interactive Investor's Richard Hunter said of the British brand's efforts to reach the top of the luxury market.

About Burberry
Burberry is a British luxury fashion house that makes clothes, accessories, and cosmetics.

Characteristic is the tartan pattern that is often found on its products and has become its most recognized and imitated symbol.

The brand's initial name was exactly "Burberry's" or "Burberrys," later destined to change in 2000 to "Burberry of London."

This choice was made when the manufacturer, now known worldwide, wanted to identify the garments produced exactly in the London locations from those produced, on the contrary, in other locations.

Both brands still demonstrate authenticity.

The company owns its stores and franchises worldwide, but also sells through concessions in third-party stores.

Both Elizabeth II and Prince Charles have granted the company a Royal Warrant.

Brands

Until recently, five Burberry brands, or five different collections with stand-alone brands, stood out:

Burberry. Known for the classic tartan style. You can find this series under two distinct labels-Burberrys of London and Burberry.

The latter designation belongs to garments produced since 1999, as on that date the company decided to change its name from Burberrys of London to a more international Burberry.

Most of the known products fall under this brand name.

Burberry Prorsum. Created by designer Christopher Bailey, which has a less classic, more glamorous feel.

It is the collection that walks the runway interpreted by the most famous supermodels and changes every year, not continuous like the other (although sometimes the tartan motif is also found in the Prorsum collection).

For example, the must-have Burberry Trench coat was also proposed in the Prorsum collection but revisited, from simple it became studded.

Burberry Black Label. Developed exclusively for Japan where the brand is very successful.

Tartan is almost absent in favor of big, smoky, dull colors or, more rarely, very soft pastel hues. Occasional denim garments and details also peep out.

Initially, the collection was exclusively men's, but the advertising campaign also invited the female audience to dress in these garments given their particularly and deliberately androgynous cut.

Later the women's collection was also introduced, with the same understated cut and color characteristics as the men's collection.

Burberry Sport. A line with a more youthful and sporty style.

Thomas Burberry. A line taking the original style and renewing it in private and high-end collections.

History
Burberry was founded in 1856 when the then-21-year-old Thomas Burberry, apprenticed to a leading tailor, opened his first store in Basingstoke, Hampshire, England.

In 1870 he specialized in refined and tasteful products and opened his first emporium in the same year.

In 1880 he added gabardine, a mixed-fiber material used to make heavy coats and dresses, to his products.

In 1891, Thomas Burberry & Sons opened its first shop in London's Haymarket. Burberry still owns the building. Until recently it housed the general management, later moved to "Horseferry House" in Westminster, behind the British Parliament.

In 1895 Burberry became a manufacturer of the uniforms of the British armed forces during the Second Boer War, changing the style of its coat.

Just in 1901, the Equestrian Knight logo appears, accompanied by the Latin inscription "Prorsum" ("forward").

In 1911 Burberry equips Captain Roald Amundsen for the South Pole expedition. He will be the first man to complete the feat.

On commission from the Crown, the company adapts pants and coats to combat. Some of its designs are thus born.

In 1920 Burberry Check, the Scottish pattern that has distinguished many products ever since, first appears.

It became popular after World War II thanks to the famous trench coat worn by Humphrey Bogart in the film Casablanca).

Burberry was bought in 1955 by Great Universal Stores (later GUS plc), the company that owned the London stores Argos and Homebase.

The change of ownership, however, resulted in the beginning of a slow decline.

Restructure

It was not until 2000, under the leadership of American Rose Marie Bravo, that the company was restructured and relaunched thanks to the testimonial of Kate Moss and the creativity of young designer Christopher Bailey (formerly Gucci).

Renewed success and sales are also helped by the launch of a perfume line that will open up new market sectors.

In the U.S., sales even doubled, from $470 million to $1 billion, so much so that Rose Marie Bravo is included by the Wall Street Journal in the main hall of Fame of 2004 and by Fortune magazine in thirteenth place in the 2004 and 2005 lists of the 50 most powerful women in business outside the U.S.

In December 2005 Burberry Group plc was listed on the London Stock Exchange, in July 2006 Rose Marie Bravo leaves office to another American, Angela Ahrendts (formerly Liz Claiborne) who seeks to reduce losses caused by counterfeiting.

In 2009 Christopher Bailey was appointed creative director (chief creative officer), and in 2012 Ahrendts is the highest-paid manager in the UK with £14.9 million: a position first achieved by a woman.

She left the post in October 2013 with the company's sales rising above £2 billion. In April 2014 she is replaced in the post by Bailey.

Recent Years
In July 2017 Marco Gobbetti is the company's new CEO and he is tasked with taking it to a higher end of the market. Christopher Bailey, who has been with the company for 17 years, remains as creative director. He will leave a few months later.

As of March 12, 2018, the new creative director is Italian designer Riccardo Tisci, who leaves the French fashion house Givenchy after 12 years.

In May 2018, the company acquired Carmen Paroni's CF&P Leather Goods in Scandicci. In July, Burberry, to defend the brand, sends unsold products worth more than 30 million euros to the rubble.

Also in July 2018, a change in the company's presidency: Sir John Peace left after 12 years at the helm, and in his place is appointed Gerry Murphy, chairman of Tate&Lyle and Blackstone's European arm.

In September 2022, after nearly 5 years at the company, Riccardo Tisci leaves Burberry. In the same month, Daniel Lee is announced as the new creative director.
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