British fashion label Burberry's slump signifies that relying solely on heritage doesn't guarantee commercial success for UK brands.
A Wake-up Call for British Luxe: Burberry's Slip-up as a Cautionary Tale
In music, being a second-fiddle version of a legendary artist doesn't cut it. The same principle can be said about Burberry, a British luxury brand once shining bright, now serving as a warning for others relying heavily on heritage. Let's take a gander.
The Tumble of Burberry
Back in the swinging 2010s, steered by Angela Ahrendts and Christopher Bailey, Burberry found a golden combination: the brand's roots (the trench), its contemporary allure (a Cool Britannia vibe), and an overlooked demographic (young, tech-savvy patrons).
But the past eight years have been a tumultuous ride for Burberry, attempting to ascend as a full-blown luxury label - a journey marred by missed growth and profit targets. In 2018, the brand even said goodbye to its iconic knight emblem and minimized its signature check pattern; venturing into unfamiliar realms. The brand has rebranded twice since then, ending up as a peculiar Chanel instead of a perfect Burberry.
This branding chaos weakened the brand's essence, lessening its luxury association. The financials followed suit. Profits plunged 17 percent, and to streamline costs by 2027, the brand announced plans to eliminate 1,700 jobs, around 20% of its workforce.
Eager to regain its footing, Burberry initiates steps to revisit its stronghold. Specific to classic outerwear products like trench coats and scarves, a key part of its history. Over the last year, it's partnered with celebs like Olivia Colman and Barry Keoghan to reinforce its iconic outerwear offerings.
The latest collection and campaigns hint at this return to the core style, featuring an unapologetic emphasis on outerwear and the checkmark logo. It's a move that resonates with luxury's unchanging rule: always remember where you come from.
Honoring the Roots
Burberry's inception isn't just a tale of a brand being born; it's a story of innovation. At 21, Thomas Burberry saw the need for a breathable fabric for comfortable clothing and launched the brand in 1856. Two decades later, he invented gabardine, a waterproof fabric that fueled the brand's international success.
In the early 1900s, the British War Office turned to Burberry to design a lighter coat to replace its clunky counterpart. The result was a practical raincoat with convenient features like storm pockets, cuffs, and military equipment attachments. Thus, the famous trench coat saw the light of day.
Over the decades, this has become a popular fashion staple and a crucial part of the British fashion legacy. Burberry's CEO, Joshua Schulman, sees the trench coat as vital to the brand's future success, though admits more work is needed to tap into its previous levels of cultural relevance. As Britain transforms into a more fragmented, less optimistic market, reaching those heights may take some time.
A Glimpse into the Future of British Luxury
Indeed, the landscape for British luxury brands is rough. With global trade challenges, a cost of living crisis, and high inflation, the luxury sector is bearing the brunt. Retail giant Harvey Nichols reported nearly £100m in losses; Michael Kors UK division is considering price cuts after sluggish sales.
British ownership of luxury brands iconic across the globe is under threat. In 2017, Jimmy Choo was snapped up by Michael Kors. Earlier this year, Kurt Geiger was acquired by Steve Madden. Ted Baker closed all its UK stores last year. As uncertainty persists, British luxury brands must reassess their strengths, grasp the Updated luxury shopper's desires, and adapt to flourish within a resurgent industry.
Luxury British brands boast centuries of history, embodying quality craftsmanship, deep-rooted heritage, and unique identities - from Burberry's trench coats, Land Rover's offspring, to Vivienne Westwood's punk aesthetic.
The Burberry narrative serves as a dilemma for luxury brands trading on provenance and heritage. They should be badges of distinction, representing coveted qualities - but when provenance and heritage become the promise, they undercut brand relevance and vitality. Timeless luxury brands are testing grounds, not museums.
For British luxury brands to thrive in the future, they need to rediscover the spirit that fueled their growth initially by spotting unmet needs or desires, and boldly march ahead. Their past is a testament, not a destination. They need to create their own version of being a first-rate Gershwin, rather than a second-rate Ravel.
Manfredi Ricca, global chief strategy officer at Interbrand, pens this piece.
- Despite Burberry's initiatives to revisit its stronghold, including partnerships with celebrities and a focus on iconic outerwear products, its financial situation continues to struggle, with plans to eliminate 1,700 jobs and a 17 percent drop in profits.
- In the face of global trade challenges, a cost of living crisis, and high inflation, British luxury brands must reassess their strengths, grasp the updated luxury shopper's desires, and adapt to flourish within a resurgent industry.
