Burberry stumbles as it moves upmarket

  During a tour of businesses in London Bond Street fashion, Shona Findlay peered into the windows of the flagship store Burberry Group PLC, but in the end have $ 1610 on a handbag by Louis Vuitton.

"There are some beautiful things, but this is not a brand that I want," the 23-year Singapore suspended sales Burberry.

Home of the most luxurious UK clients won in the first half of the last decade by plastering his dog collars check camel, red and black on everything from baseball caps. Now that attempts Burberry high-end products such as T-shirts $ 300, $ 3000 floral print dresses and clutches $ 10,000 crocodile is moving not excite the largest donors.
Price interviewed

"With other luxury brands such as Chanel, Prada, Louis Vuitton, Gucci, etc, what you buy is a real point of difference," said Jane Kellock researchers Stylus. Burberry under "area offers everything justify not just the price."

Burberry, the Monday shows his Spring-Summer 2013 collection airstrip in the British capital, said this week that the profit for the year to end of March will disappoint investors. The company said same-store sales declined in recent weeks, sending shares and delete the lowest $ 2 billion market value.

The Company Store responsible for his misfortune on industry-wide slump spending Visits told decline since the end of August. Burberry, but may be an outlier in an industry that has grown 25 percent since 2009, according to Bain & Co., Burberry Sales rose to meet analysts' expectations for the last two quarters, while SpA as its competitors like Hermes International SCA and Prada easily surpassed.

Move to its upscale image and refer customers goods more expensive, the 156-year old company has eliminated its handbags and the cheapest ditch in the United States this year. Chief Financial Officer Stacey Cartwright said the move disproportionately from the downturn in the economy as economies around the world contributed cool.
Transformation

Former CEO Rose Marie Bravo, who joined Saks Fifth Avenue in 1997, has transformed the British manufacturer of raincoats and umbrellas expanded its range and holding fashion shows. There, the demand for the Burberry plaid by trying new colors rose and put the design on dozens of products. Congratulations to price somewhat lower than that of its competitors, synchronization Burberry "affordable luxury". Supervision Bravo earnings rose more than fourfold in 2005.

The change has taken its toll on the brand that fit a reputation for attracting young British football fans Burberry has designed baseball caps with pressure tracksuits. In 2004 forbade pubs and clubs across the country customers bear the label. Congratulations limited use pattern and joined in July 2006.
New Strategy

His successor, the former Liz Claiborne Inc. executive Angela Ahrendts, high prices, pushed into new markets such as Africa, and expanded non-apparel company Burberry. Ahrendts also led the luxury industry in the digital age, live streaming Burberry fashion show on their website.

Shares more than "doubled since the appointment Ahrendts, exceeding the 59-percent jump from LVMH Moët Hennessy Louis Vuitton SA shares and 24 percent ahead of Gucci-owner PPR SA at this time.

Burberry now faces a dilemma. Many consumers that make the love can not pay the full price for the company coats, clothes and bags. Others, such as Findlay could afford it, but are not sufficiently moved by it, their money is.

Uche Okonkwo, CEO of the consultant Luxe Corp, said it is understandable that the sales tracking Burberry: Getting rid of so-called luxury mass for superior products inevitably leads to customer order.

"The change in brand positioning is usually a couple of seasons for consumers to adapt," said Okonkwo, who is moving to expand eventually help predict profit margins. "You can not sell to everyone."