4 Reasons I'm Bullish on Burberry

4 Reasons I'm Bullish on Burberry

1- New brand identity 

2- Personal branding: Riccardo Tisci the brand 

3- Relevant and modern product offering 

4- Controlled and limited product releases as a unique selling strategy 

1- Updated/new brand identity 

A new brand identity can increase like-for-like sales at luxury brands as demonstrated in recent years by Saint Laurent and Balenciaga [both Kering] with changes to their product portfolios and logos. In my opinion, the reasoning behind this increase in like-for-like sales lies with brand perception, in recent years a change in perception of the Gucci brand as being fashion-forward has dramatically increased like-for-like sales.

Burberry’s case: 

Christopher Bailey signature = feminine, romantic, “modern version of British-ness”

Riccardo Tisci signature = gothic, streetwear-focused

Both designers are very different in their signatures so it is very likely that Riccardo Tisci’s designs will starkly contrast against those of Christopher Bailey, and could provoke a strong positive or negative reaction out of consumers. The greater the divergence between the new brand identity and the old one, the more potential risk and reward for the brand. 

Where I could be wrong: the new brand identity provokes a neutral or negative reaction from consumers and doesn’t drive sales, moreover, it could result in an overspend on marketing.

2- Personal branding: Riccardo Tisci the brand 

Despite consensus’ argument that Tisci is too conceptual for Burberry and was not commercially successful, he has a contract with Nike which has been renewed on multiple occasions, was the recipient of the Council of Fashion Designers America International Award 2013 [the CFDA awards are the equivalent of the Oscars for fashion and the International Award is similar to the “best film” prize] and is the first and only fashion designer to be nominated for a Grammy Awards (2012). 

Further, his personal brand has extended outside the world of fashion, accordingly he has close ties to some of the most influential celebrities in the world such as Beyoncé which makes me feel more positive about the brand as no matter how “good” or “bad” the designs are, his influential friends will probably wear them as a sign of support. 

Where I could be wrong: despite celebrity support for the brand, this may not trickle down to support from the mass market for luxury. 

3- Relevant and modern product offering

A modern and relevant product offering such as trainers and logo t-shirts makes me feel more positive about the brand because they’ll be able to attract a new group of consumers [Gen Z] who probably wouldn’t have been too interested in their previous portfolio of trench coats and ponchos. Moreover, Burberry simply sharing a similar product portfolio structure to that of fashion-focused brands such as Gucci still makes me feel more positive about Burberry as it’s perception could be elevated to a similar caliber of its more fashion-focused brands such as Gucci which have driven shares at Kering +40%

An example of a relevant and modern product offering 

Google Trends search showing the growing popularity of such athleisure-focused products 

Where I could be wrong: Burberry is now seen as any other fashion-forward brand as opposed to cutting-edge, ultimately failing to take any market share from Gucci or Balenciaga.

4- Controlled and limited product releases as a unique strategy

Burberry will be the first luxury brand to pilot this strategy which has seen phenomenal success for streetwear brands such as Supreme and Palace. The unique strategy = coveted label + suddenly available product + controlled quantities. The appeal to consumers is clear: buy now or forever miss out on either owning something few others have or re-selling it on websites such as eBay at a markup.

Where I could be wrong: Burberry launched a “See Now, Buy Now” strategy in September 2016 and saw record digital reach and engagement, although this does not always translate to sales. The “See Now, Buy Now” strategy offers instantly shoppable collections because the minute you see products on the runway, you can buy them immediately after the show. I am concerned that their new unique strategy if not planned well enough could leave lost periods of selling and merchandise sitting in stockrooms for months waiting for the fashion show to take place first, which was the case at Tom Ford in 2017. Further, Burberry did not use this strategy for their entire last collection implying there were still flaws 

Conc: wait and see how their unique strategy plays out and how Riccardo Tisci's creations are received at his debut collection for Burberry on 17/09/18 as this is a potential turnaround opportunity for the brand, coupled by the appointment of new CEO Marco Gobbetti last year. 

By Ashley Agedah

A Girl Invests