Today we will speak of Burberry, the luxury British brand representing British heritage and the lifestyle people are so eager to associate themselves with. But was it always like this? Let’s find out about the history of this brand and key elements of its business model.
Burberry was founded in 1856 by 21-year old Thomas Burberry as a gentlemen’s outfitter in Basingstoke. In six years, the company moved to their first London store. Few years later Burberry invented gabardine, weatherproof and resistant fabric that became the root of company and Burberry was chosen as a supplier of officers’ raincoats to the British army. Over the time, Burberry started developing retail and wholesale business internationally. In early 1900s Thomas Burberry began to supply some retail in New York and Buenos Aires and the first international store was opened in Paris and by 1920 the company made some wholesale agreements with Japanese retailers.(Moore &Birtwistle, 2004)
In 1912 the Tierlocken coat was patented, which was the predecessor of Burberry’s iconic product Trench coat, which was popular during WWI among officers. In 1920s other prominent Burberry’s attribute was introduced: Burberry check, registered as a trademark. (Marketing Magazine, 2002). Gradually, brand started to be more associated with middle and upper classes of the British Society. Appearances of Burberry’s trench coat in the popular movies such as “Breakfast at Tiffany’s” on the Audrey Hepburn helped to build the brand image
Source:(Burberry, 2015) Burberry
In 1955, the catalogue company Great Universal Stores (GUS) acquired Burberry, which provided the funding for further UK and USA expansion. Also, licenses were granted to some third parties in Europe and Asia in order to facilitate the expansion of the brand and increase the presence in foreign markets (Moore &Birtwistle, 2004). However there are opinions that the distribution strategies lacked focus and resulted in Burberry’s lower control over its brand (Credit Suiss First Boston, 2004).
In 1980s brand started to have big issues with its perception, when football fans travelling to European cities for matches started to adopt homegrown brands, and Burberry became a favorite. The problem was so big, that taxi drivers learnt to turn away young men wearing Burberry baseball caps and jackets. (The Economist, 2011) It seemed that the brand lost its charm forever. The brand became “appealing only to the hunting, shooting and fishing set” (Marketing Magazine, 2002).
By 1997 the vulnerability of Burberry’s strategy became too evident when their annual profits dropped from £62m to £25m. After that, GUS appointed Rose Marie Bravo as new chief executive for Burberry and a new management team. Their new strategy sought to re-position the Burberry’s brand as a distinctive luxury brand with a clear design, merchandising, marketing and distribution strategy that would attract new and younger audience, but still retaining their traditional customers. (Burberry, 2002)
Let’s get some insight into the Burberry’s business model. The brand is based on “Authentic British heritage, a rich association with history and culture – royalty, explorers, VIPs” (Burberry, 2013-2014). Burberry is not a traditional luxury goods company and has attributes of both retail and luxury goods companies. (Credit Suiss First Boston, 2004).The distribution channels are both retail (70%), including digital, and wholesale (27%).Also company has licensing agreements in Japan, “leveraging the local and technical expertise of its license partners” (Burberry, 2013-2014).Company operates in Americas, Asia Pacific and Europe, Middle East, India and Africa (EMEIA)
Source: Moore, C. M., & Birtwistle, G. (2004). The Burberry business model: creating an international luxury fashion brand. International Journal of Retail & Distribution Management. 
Source:(Burberry, 2013-2014) Burberry
The brand currently has several product lines: Burberry Brit represents 50% of the revenue and is the most casual collection that company has. Burberry London, which represents other 45% of the revenue, is a tailored collection, worn on weekdays for work. The last line, Burberry Prorsum, accounts for 5% of the revenue, and is the most fashionable collection. The items are produced in a limited quantity in order to satisfy the demand for exclusivity among affluent consumers. (Moore &Birtwistle, 2004) Products of the line such as Burberry Prorsum are seasonal and have lifecycle shown in Picture 3 below). The collection is presented on the London Fashion Week in Winter/Autumn and Spring/Summer seasons twice a year.
Source: Cornell University (2006).
The Burberry communication model consists of four elements: (1) Advertising, (2) Fashion shows, (3) Editorial placement and Media coverage (Moore & Birtwistle, 2004). All of them are the crucial part in striving for success as Luxury Fashion Company.
Source: Moore, C. M., & Birtwistle, G. (2004). The Burberry business model: creating an international luxury fashion brand. International Journal of Retail & Distribution Management , 412-421
Starting from 1999 all the Burberry’s Campaigns are mainly photographed by the famous commercial photographer Mario Testino. Since then, the face of the company for a long time was supermodel Kate Moss, as well as other celebrated British individuals such as Jerry Hall, Lord Frederick Windsor, Emma Watson, Cara Delavigne, and etc. The focus of Burberry was on emphasizing their clothes being worn by famous, young, successful persons, without casting off classic roots of the brand in order to attract younger audience. (Marketing Magazine, 2002) As a result, soon after re-launch took place, Burberry had 21% annual increase in operating profits to £90.3m, achieved a 10% sales increase to £500m. (Burberry, 2002)
Source:(Burberry, 2015) Burberry
As we saw from the history of the company, Burberry was not always successful. In 1987 the brand had a substantial decline. After that, the new management team developed strong marketing strategy that helped to renew consumers’ interest. This led to a development in an image, lifestyle, and perception of the coherent brand identity that attracted more diverse categories of customers throughout the world.
By: Anna Karpukhina
Bibliography:
Burberry. (2013-2014). Burberry PLC Annual Report. London: Burberry.
Burberry. (n.d.). Company History. Retrieved April 13, 2015, from Burberry: http://www.burberryplc.com/about_burberry/company_history
Burberry. (2002, May 29). GUS PLC Burberry Partial IPO. Retrieved April 13, 2015, from http://www.burberryplc.com/media_centre/press_releases/2002/2002-05-29
Burberry. (n.d.). Group Overview. Retrieved April 16, 2015, from http://www.burberryplc.com/about_burberry/group-overview
Cornell University. (2006). Basic, Fashion, and Fad Products. Retrieved April 15, 2015, from https://courses.cit.cornell.edu/cuttingedge/lifeCycle/03.htm.
Credit Suiss First Boston. (2004). Burberry Group. London: CSFB.
Marketing Magazine. (2002, August 1). Great British Brands: Burberry – Fashionable from the 1920s through to the 1960s, Burberry declined with deferential society but is now reborn. Retrieved April 13, 2015, from Marketing Magazine: http://www.marketingmagazine.co.uk/article/154758/great-british-brands-burberry—fashionable-1920s-through-to-1960s-burberry-declined-deferential-society-now-reborn
Moore, C. M., & Birtwistle, G. (2004). The Burberry business model: creating an international luxury fashion brand. International Journal of Retail & Distribution Management , 412-421.
The Economist. (2011, January 20). Burberry and globalisation: A checkered story. Retrieved April 14, 2015, from The Economist: http://www.economist.com/node/17963363
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