Case Studies

Tisci's Reinvention of Burberry Beats expecatations despite Hong Kong Protests

Shares in the British luxury goods maker Burberry have risen 14% this month following their recent trading update on Thursday as investors welcomed the 11% rise in pre-tax profits to £193m with a 5% jump in overall revenues for the first-half of the year.


Sales growth was storng in Asian markets including Japan, China, and Korea - partly due to sales transference from customers displaced by the on-going Hong Kong protests - meaning that total Asian market sales were up in the mid-single digits YOY. Sales in the US were moderally weaker suggesting a low-single digit growth rate while Europe and the MENA were up roughly in mid-single digits.


Results were better than the market had anticipated causing the shares to spike up 7% in early hours trading in London shortly following the annoucement. Investors had been concerned about the brands retail store and sales exposure to Hong Kong which despite suffering "double digit sales declines". However, overall brand sales were somewhat compensated by stronger trading in adjacent markets where Woozle channcel checks confirmed.


CEO Marco Gobbetti's leadership has seen Burberry's revival gaining speed with particularly strong results in core markets. In addition, creative director Riccardo Tisci's collections have achieved double digit sales growth and now account for up to 70% of Burberry's range - dominating new collections and the sales mix. Tisci's modern and edgier interpretation of Burberry's more traditional and classic styles have helped to attract a younger audience - particular the focus on new monogram logo designs.


Woozle's channel checks had uncovered strong trading across menswear categories and stronger than expected Asia ex Hong Kong results which more than compensated for client concerns around the on-going protests. Our interviews and primary research work also showed positive trends in new Tisci collections with new designs and more streetwear/althleisure elements helping to boost results across womenswear. Social media performance was also helping to pull in a younger and affulent customer base with products including the siganture TB bag gaining lots of traction and resulting in accelerating sales at most locations we checked.


Burberry's social media first approach has so far enjoyed double digit growth in engagement and reach across instagram and WeChat followers. Respondents reported that inspiring and creative content and promotions has helped to boost results in core locations and further investment has many optimstic about their future trading.


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