Burberry Group PLC (LON:BRBY)

QUOTE AND NEWS
Financial Times  Jun 30  Comment 
Former Céline chief Marco Gobbetti has a proven record of pairing well with designers
Financial Times  Jun 28  Comment 
Brand under fire over award to Bailey after exit as chief, and to new finance director
guardian.co.uk  Jun 21  Comment 
Fashion group seeks successor to Sir John Peace after rows over bosses’ pay and role of chief creative officer Christopher Bailey Further boardroom upheaval is under way at Burberry after the luxury fashion brand revealed its long-standing...
Financial Times  Jun 6  Comment 
HSBC downgrades stock to ‘reduce’ in flat wider market for UK equities
guardian.co.uk  Jun 6  Comment 
Designer, who has faced protests over his pay, is due to hand over day-to-day running of the luxury goods retailer next month Burberry is to hand Christopher Bailey shares worth £10.5m next month when day-to-day management of the luxury goods...
MarketWatch  Jun 6  Comment 
Burberry Group PLC was downgraded to reduce from hold at HSBC on the luxury brands top-line underperformance. HSBC cut the target price to 1,580 pence sterling (or $20.39) from 1,630 pence sterling (or $21.04). Analysts highlight the various...
MarketWatch  Jun 6  Comment 
Burberry shares down 3% early Tuesday following downgrade
Forbes  May 18  Comment 
The future looks bright for Burberry despite last year’s bottom-line blip. Here is why.




 
TOP CONTRIBUTORS

Burberry Group plc (London Stock Exchange :BRBY) is the UK's number one luxury retailer by revenue. The firm designs, sources, manufactures and distributes luxury mens, womens and childrenswear and non-apparel accessories globally through its own retail stores, concessions and wholesale customers. In fiscal 2010, BRBY reported net sales of £1.28 billion and net income of £81.4 million.[1]

Despite harsh economic conditions in Europe, where Burberry receives nearly half of net sales annually,[1] the firm continued to grow and prosper in fiscal 2010. The main driver for Burberry's success has been its restructuring of its global business plan, such as opening more stores in the Asia Pacific region. In addition to global restructuring, Burberry has focused on improving non-apparel (fashion accessories) sales to have a more balanced product line.

Company Overview

Business Growth

2010 Fiscal Year Performance

  • Burberry posted fiscal year revenue of £1.28 billion, a 7% increase compared to fiscal 2009.[1]
  • The firm reported net income of £81.4 million, compared to a net loss of £6 million in fiscal 2009.[1]

Business Segments

  • Retail (58% of fiscal 2010 Revenue)[1]
  • Wholesale (34%)
  • Licensing (8%)

Geographic Presence

  • Europe (44% of Revenue)
  • Americas (27%)
  • Asia Pacific (24%)
  • Rest of World (5%)

Trends and Forces

Exposure to European Macroeconomics

Burberry, based in the U.K., receives nearly 50% of annual revenues from European markets.[1] Furthermore, Burberry is a luxury retailer whose profits are sensitive to consumer confidence levels. If a Europe-specific economic crisis, such as European debt contagion, occurs, then Burberry could suffer relative to its international competitors. To obtain a more diversified geographic presence, BRBY has opened stores in the Asia Pacific region -- the fastest growing luxury retail market in the world.

Burberry Focuses on Non-Apparel Business

Burberry's apparel line, such as shirts, coats, and pants, has been the firm's core revenue producer since the firm's beginning. Although, the firm has focused on improving its non-apparel business -- items such as handbags, scarves, shoes, and jewelry.[1] The key non-apparel product is the handbag, most of which are designed with Burberry's trademark flannel print, which composes 48% of non-apparel revenue.[1] Burberry has continued to expand the non-apparel business in Tokyo -- the world's largest fashion accessories market.[1]

Competition

Burberry competes against other retailers in the estimated £150 billion luxury goods market.[1] Publicly-traded companies are listed below. BRBY also competes against privately-held luxury retailers such as Giorgio Armani, Prada and Gucci.

  • Hugo Boss The German luxury retailer produces the same product lines as BRBY and competes for European, American, and Asian market share.
  • LVMH Moet Hennessy LVMH's Fashion business, with brands such as Marc Jacobs and Louis Voitton, competes directly with Burberry's Retail business. LVMH also has profitable wine and leather goods businesses.
  • Christian Dior: Like Hugo Boss, the Paris-based Dior creates similar product lines and competes with Burberry in European, American, and Asian markets.
  • Coach The U.S. luxury retailer competes with Burberry's fashion accessories product line.

References

  1. 1.0 1.1 1.2 1.3 1.4 1.5 1.6 1.7 1.8 1.9 Burberry 2010 Annual Report
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