Burberry's Brand Remolding And Transformation Has Achieved Initial Success In The Chinese Market.

With the new logo, logo rich products and massive investment in the retail, marketing and communication fields, Burberry's brand remodeling project has been gradually launched under the leadership of creative director Riccardo Tisci. Today, this transformation has achieved initial success in the Chinese market.

According to the British fashion company's first quarter profit in fiscal 2020, Burberry's same store sales grew by 4% over the three months to June 29th, much higher than market expectations. Meanwhile, at the end of June, the new Tisci series accounted for about 50% of the total supply of goods in the main store (the value in March was about 10%-15%). The new series continues to record strong two digit growth. What is particularly noteworthy is that sales in the mainland market increased by 15% over the previous year, making it the only source of two digit growth.

In short, the latest report shows that Chinese consumers love Tisci's new version of Burberry. Zhang Chen, a 22 year old Chinese male consumer, told us that since last year the brand had set up a giant Thomas Burberry bear on Taiping Lake in Xintiandi, Shanghai, he had begun to notice the change of Burberry. "That device left a deep impression on me, which made me curious about the old brand of my parents," he said. Today, Zhang owns a "Thomas Burberry Monogram" T-shirt (priced at US $400), which is exactly the first product designed by Tisci for the brand. He said he was also considering buying the brand's "Monogram Strip E-canvas" satchel (priced at $690), which he thought was "cool."

The importance of Burberry handbags and accessories categories is also rising, which is very important for luxury brands to win the Chinese market, because consumers are very fond of bursting bags. Burberry's TB handbag series has attracted more and more attention from shoppers recently, according to Rita He, a luxury purchasing agency. "Many guests call the TB bags of the show, and the canvas bag is also very popular recently," she said. However, she is not sure whether the TB bag can be regarded as a burst bag, "because its popularity is still lagging behind some of the currently popular models, including the Louis Vuitton trunk package, the Chanel Gabrielle package and the Dior saddle bag."

In addition to product innovation, Burberry has invested a lot of resources to publicize brand transformation. Learning from the commercial success of Supreme and other street brands, the brand tests WeChat's "Drop" retail mode in China to stimulate consumers' excitement and desire for brands. Burberry also relocated and refurbished some retail outlets in major Chinese cities to ensure that their store products meet the brand's new DNA.

Although Burberry appears to be on the right track for business transformation, doubts still exist, such as whether the current upward trend can continue to develop in a very unstable situation (such as Britain's retreat from Europe, trade wars and China's economic slowdown).

In an investor report released in July 12th, Citibank said Burberry had bright prospects. "In view of the improvement in the availability of new products, we believe that the company will achieve stronger growth in the second half of this year." The brand plans to increase the total share of Tisci new products to about 60% in September and raise it to about 75% by the end of the year. However, J.P. Morgan showed more cautious attitude, precisely because of the timing. "This cycle is more difficult. We never saw (brand) succeed in the unfavorable cycle, and Burberry was greatly affected by the fluctuation of the British pound. "

Even the brand itself is cautious about the future. The rebound in same store sales in the first quarter did not give the brand enough confidence to raise its annual forecast. More importantly, Tisci has not yet proven that its design can bring halo effect to products (such as the scale brought by Alessandro Michele for Gucci), so as to truly consolidate the brand transformation. Author: Yiling Pan