Monday, March 8, 2010

The Burberry Brand

by Nicole Schloss

Emma Watson for Burberry, 2010

The Burberry Business Model:
Creating an International Luxury Fashion Brand
This article, written by Christopher M. Moore and Grete Birtwistle, was first published in the International Journal of Retail & Distribution Management, volume 32, issue 8 in 2004. Christopher M. Moore is a professor in the School of Management and Languages at Glasgow Caledonian University as well as the Director of the George Davies Centre for Retail Excellence. He received his PhD in international fashion retailing and branding, particularly with respect to fashion marketing. Grete Birtwistle is Head of the Division of Fashion, Marketing and Retail at the Caledonian Business School of Glasgow Caledonian University. She earned her PhD in store imaging and positioning for fashion retailers. She currently researches the ways of increasing the speed in the fashion supply chain and textile sustainability. Additionally, Moore and Birtwistle founded the British Institute for Fashion Research. Their article systematically outlines the strategies which Burberry, the luxury brand founded in 1856, took to improve its management and brand quality in 1998 after a £37m decrease in sales revenue over the 1997-1998 fiscal year.

Moore and Birtwistle note that “the viability of a fashion brand is dependent upon the efficacy and the appropriateness of the decisions of those responsible for its management,” meaning that the success of a brand comes not just from the look of the clothes, but also from its internal organization. Thus it was Rose Marie Bravo’s appointment as CEO in 1997 that brought about a multitude of changes that effectively changed all aspects of the brand, bringing it into the contemporary fashion world. As a brand that has existed since 1856, Burberry was caught between its traditional, upper echelon clientele and the need to move into the fast-paced, fashion-forward lifestyle to which all luxury brands of the day have adapted.

Systematically, Moore and Birtwistle break down the Burberry model into four categories each with their own subcategories; products, manufacturing and sourcing, distribution channels and marketing communications. These four major governing sects of Burberry are united by the three major components by which any luxury brand must abide; brand management, product design and sourcing, and brand distribution. Brand management, meaning establishing a distinct logo and lifestyle was crucial in defining Burberry as a luxury brand through advertising and the creation of four flagship stores. Product design and sourcing allowed for the creation of six different Burberry labels, all under the creative direction of Christopher Bailey. Burberry also worked hard to ensure the integrity of their brand would remain the same by reducing its use of outside licensees. It owns all of its retail stores (except those in Japan), thereby making it easy to control the quality of its products. Finally, a change in brand distribution allowed Burberry management to really know where and how its products were being sold. As such an expansive empire, Burberry managed to centralize its management and maintain a tight control on all of its retail and wholesale chains.

While this article was extremely factual and concerned with numbers and methods of organization, a few points stand out. First, this type of business model for a fashion empire seems both effective and common across other brands. Gucci under Tom Ford is mentioned as an example of a company that also maximized its internal control and saw immediate success. A fashion brand cannot function if its management staff is uncoordinated and thrown off by globalization. It was interesting to see how the changes in fashion tastes were the impetus for this realization. The loss of Burberry’s so-called “cachet” (p.1) caused its internal structure to also fall apart. Thus a business strategy with a determined system of checks and balances is necessary to keep up with the times. The symbiotic relationship Burberry has achieved between its retail and wholesale chains also has contributed to its continued success in both the luxury and affordable markets. In order for Burberry to maintain expensive advertising campaigns and consumer interest, it needs wholesale chains for extra revenue.

Strategically showing the mix of Burberry consumers by Mario Testino 2001

The article highlighted the machine-like quality of a luxury fashion brand in its need to be organized and extremely centralized. The lavish lifestyle Burberry (and any other fashion brand) promotes is just as manufactured as any of its clothing. Brands are sold to us with all-encompassing packages of luxury yet we rarely think about the sourcing and licensing issues. Burberry’s model shows us that brand reinvention must happen on both internal and external levels, meaning management and direction, and the appearance of the clothes themselves.

The Burberry old garde and the new together in 2002 by Mario Testino

Burberry's ads 2008 above and 2009 below


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