Burberry Group PLC (LON:BRBY)

QUOTE AND NEWS
Forbes  Nov 30  Comment 
There’s no shortage of inspiring content from fashion brands and retailers on Snapchat these days, but here's a pick of the best including Everlane, Burberry, Chubbies, Sophia Webster and more.
Wall Street Journal  Nov 30  Comment 
Rather than adding stores, some luxury labels are aiming to boost sales at existing sites. One way: catering to the whims of their best customers.
guardian.co.uk  Nov 9  Comment 
Company’s profits hit by dwindling tourism spending in Europe and tougher trading in the US and Hong Kong Burberry is cutting 15-20% of its product lines, after the luxury fashion brand’s profits fell by a quarter in the first half of the...
Financial Times  Nov 9  Comment 
Luxury group reports 34% fall in earnings but says turnround is on track
Wall Street Journal  Nov 9  Comment 
British luxury retailer Burberry reported a 40% drop in first-half profit amid higher costs, underscoring the continued challenge for Chief Executive Christopher Bailey as he implements a turnaround plan.
newratings.com  Nov 9  Comment 
LONDON (dpa-AFX) - Burberry Group plc (BRBY.L) reported profit before tax of 102 million pounds for the six months ended 30 September 2016 compared to 155 million pounds, prior year, after adjusting items as a result of strategic actions. Reported...
Forbes  Nov 3  Comment 
Luxury M&A has historically failed to help retailers regain brand traction and shopper allure. Moreover, many M&A retail deals fall apart when there is no intentionality around how the companies are going to fit together, beyond melding financial...




 
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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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