A few weeks ago Christopher Bailey, the man credited with Burberry’s revitalization, hosted his final fashion show in London. He described his last collection as “a real mishmash of things” with an eye on the past and hope for the future. And a brief look at Burberry’s brand equity around the world suggests that the word “mishmash” might equally well apply to that too.
Bailey is famed throughout the fashion world as the wunderkind designer who help turn a struggling fashion brand into what Elizabeth Paton in the New York Times described as “a global symbol of Britishness”. Paton identifies three important actions that helped turn the brand around:
1.Bailey’s collections were filled with symbolism drawn from British culture, life and weather.
2.He associated the brand with British models, singers and celebrities.
3.He embraced digital long before most rivals did to reach new luxury audiences.
But as Paton also notes Bailey’s recent tenure as CEO has left the company with flagging sales, profits and share price. In May of 2017 the company reported total revenue down 2 percent and profits down 21 percent.
Intrigued by the dynamics at play I had a quick look at what BrandZ could tell me about Burberry from a consumer perspective but what it really told me was that the world of fashion is still a very fragmented one.
In the biggest luxury market in the world, the U.S., Burberry has become more meaningful and different over time – a good sign – but has slipped in terms of salience – potential luxury buyers are less likely to think of the brand – perhaps drowned out by brands like Michael Kors, Calvin Klein and Ralph Lauren. In the third largest luxury market of China, the brand has grown in terms of being seen as meaningfully different but salience has lagged the other two measures. China already represents 40 percent of Burberry’s sales and the BrandZ data suggests that continuing to grow distribution and salience might reap further rewards.
Until recently Burberry faced a familiar challenge in Japan, the world’s second largest luxury market. In 2015 a licensing agreement with Sanyo Shokai Ltd drew to an end allowing Burberry to take direct control of its business in Japan. However, the brand was left to overcome a legacy of accessibly priced goods out of line the with brand’s global aspirations. Today, Burberry is meaningful and salient to Japanese buyers is not seen to be that different, a prerequisite if the brand is to justify a higher price point.
The only market where the Burberry brand has unequivocally grown over time is the UK (although recent data is sadly lacking in BrandZ). The brand grew on all three topline measures of brand equity between 2008 and 2014. Perhaps not surprisingly, while the brand has grown in the minds of UK consumers its profile has changed for the worse in France, becoming more different but less meaningful. Perhaps a growing symbol of Britishness is just not that appealing to French consumers.
Combine the turbulence of the fashion industry with a business still struggling to unify its image around the world, add in the impact of increased tourism on demand and pricing, and perhaps it is no wonder that Burberry is underperforming. There is no doubt that Christopher Bailey revitalized Burberry but the battle for brand salience has only just begun. But why do you think Burberry might be underperforming?
Written by Nigel Hollis, Executive Vice President and Chief Global Analyst at Kantar Millward Brown.