Burberry Moves For A Comeback Amid A Renaissance In Luxury Brands

Burberry Group plc BURBY, the iconic British fashion brand has largely been left out of the luxury fashion renaissance in the U.S.

Notably, it has been Generation Z’s appetite for luxury goods that drove competitors LVMH Moet Hennessy Louis Vuitton SA LVMUY and Gucci owner Kering S A/ADR PPRUY to all-time highs earlier in 2018.

Despite the increased interest in luxury goods, Burberry has mostly been absent from the trend. 

American Sales Rise In Q1

To jumpstart the brand, the company's newly arrived creative chief Riccardo Tisci employed British designer Peter Saville, who was responsible for PVH Corp PVH's Calvin Klein’s 2017 logo refresh. Saville created a new logo for Burberry in just four weeks.

Burberry CFO and COO Julie Brown said on the company’s first-quarter earnings call that the brand is seeing ongoing improved momentum after reporting that the Americas delivered high-single-digit percentage growth.

Burberry is seeing a "considerable uptick in performance in Americas, and that's seeing the benefit of traffic. It's also seeing the benefit of conversion and an improvement in AUR,” Brown said.

While possibly playing catch up at this point, Burberry said its new model is to be more creatively led and engage consumers with more frequent product releases to "surprise them throughout the year," Brown said. The brand has yet to release any notable luxury athleisure wear, a move that helped competitors Balenciaga, Louis Vuitton and Gucci appeal to a wider demographic.

In the past, ultra-luxury brands have typically stayed true to their heritage and adapted slowly to market trends, but younger consumers continue to show they care about products, not heritage.

Burberry's new logo shows it may be catching on to this trend, said Matt Powell, vice president and senior sports industry advisor at The NPD Group.

"Gen Z clearly has shown an affinity for luxury products and logo products; their interest in these brands are driving good results. The luxury designer brands' embrace of athleisure has helped wake them up from the couture doldrums they were in clearly in."

B&B: Burberry And Beyonce

Burberry recently announced a collaboration with Beyonce, a move that arguably jumpstarted FILA’s resurgence after the pop superstar was seen wearing the athleisure brand's products. Burberry said its link with Beyonce drove its highest-ever Instagram story views of more than 1.1 million. The brand said its Instagram engagement rate jumped 25 percent from the fourth quarter to the first.

While the comeback is still early for Burberry, it appears the company is finally capitalizing on a broader surge in attention for luxury goods.

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Photo courtesy of Burberry.

Posted In: BalenciagaBeyonceCalvin KleinFilagucciJulie BrownMatt PowellPeter SavilleRiccardo TisciAnalyst ColorEarningsRetail Sales