Burberry hails "strong initial response" to new vision as profits rise
Burberry CEO Marco Gobbetti said the British luxury house had been "energised" by the "strong initial response" to its new creative vision as it posted operating profits up 36% in the half year to 29 September 2018.
During the period revenues dipped slightly, by -3%, to £1.22bn, however when beauty wholesale is removed from the equation (Burberry disposed of this business), revenue was up 3% year-on-year. Like-for-like retail sales were also up 3%. Reported operating profit was up 36% at £173m.
Gobbetti said the company had witnessed an "exceptional" response to the creative vision and new branding presented by chief creative officer Riccardo Tisci, who showed his first collection for the brand at London Fashion Week in September.
Tisci also revamped Burberry's logo, in partnership with designer Peter Saville, and introduced a new house monogram based on the initials of the company's founder Thomas Burberry.
The company has also been maintaining its digital leadership by releasing limited edition drops on social media, such as Instagram and Wechat, engaging a new generation of customer, in particular in Asia. However Tisci's vision aims to embrace customers of all ages, Gobbetti said.
"Riccardo unveiled his debut collection Kingdom in London, celebrating Britishness in all its facets. Riccardo’s vision is of a Burberry that is as much for the young as for the old. Street influences play just as important a role as codes of luxury and sophistication. There is an attitude and a spirit that is reverent but renegade. The response to Kingdom has been exceptional, including from wholesale partners. It was the second-most viewed show this season on Vogue.com and continues to be endorsed by some of the world’s most followed influencers," Gobbetti said in this results statement.
Gobbetti and Tisci, who previously worked together at LVMH's Givenchy, have also shaken up the delivery schedule at Burberry and have moved to more frequent product drops and collaborations on a monthly basis, as opposed to two main seasons, to keep the offer fresh and exciting. Gobbetti said this strategy had again attracted more young customers to the brand, and more successfully than the prior strategy of two "see now, buy now" collections launched in February and September.
"In conjunction with the show, we initiated our new go-to-market model of frequent product drops. Launched initially through a new social selling mechanic on Instagram and WeChat, the B Series presented a limited-edition selection of Riccardo’s first products for Burberry," Gobbetti explained.
"This sold out rapidly in China, prompted much higher levels of engagement online and attracted double the mix of new and younger customers to the brand than the February capsule. The B Series product drops will now occur monthly and will also be available on Kakao in Korea and LINE in Japan. As previously announced we will also have an exciting collaboration with Vivienne Westwood available in December," he added.
The brand also recently responded to criticism of its prior practice of burning or destroying unsold product by vowing to repair, reuse and recycle where possible and it has also revealed it will no longer be selling fur.