Burberry, as pointed out by Business of Fashion, could (and most importantly would like to) become the British Gucci. To do so, will the new CEO Jonathan Akeroyd follow the plan set by his predecessor (Marco Gobbetti) or change path? The choice today isn’t simple, given the complications caused by the following two factors: one, the war in Ukraine and two, the Zero-Covid policies in China, which has already left a (negative) mark in March, last month of the English fiscal year. This can be understood by analyzing the preliminary financial results (21/22) presented by Burberry, as they showcase an important growth tied to the “full-price” business model. This allows the luxury brand to reach its objectives for the current fiscal exercise (at least for now).
Full-price sales reward Burberry
Growth compared to the pre-Covid results was brought on by full-price leather goods’ sales and apparel, respectively +28% and +39%. “I can’t wait to outline the plans to build on this solid basis and accelerate growth given our last intra-year results from November”, commented Jonathan Akeroyd, CEO of Burberry. The ex-Versace manager replaced Marco Gobbetti (now in Ferragamo), who had started implementing a multi-year strategic plan with Burberry before leaving.
The goal remains elevating the brand’s positioning, reducing wholesale and discounted sales while investing in leather goods. Data shows that the plan is also working thanks to the creative continuity guaranteed by Riccardo Tisci, the director that began evolving the style of the brand.
Critical factors (same as for everyone)
Burberry now has to deal with the war in Ukraine and Covid in China. In the 1st quarter 2022, in fact, comparable retail sales have grown by “just” 7% compared to the January-March period 2021. “The lockdowns in China due to Covid have weighed on the March performance”, points out the luxury brand. China and Korea performed well, but the USA even better, Overall revenue from the fiscal year 2021-2022 grew by 23% on the year before, reaching 2.83 billion pounds (3.3 billion euro). A result worth 10% more than in the 19-20 fiscal year.