IN THIS BLOG POST, I JUST DIRECT QUOTES AN ARTICLE WHICH FURTHER HELP YOU TO UNDERSTAND BURBERRY SUCCESS IN CHINA.
China success
takes Burberry shares higher
Posted
on April 20, 2011 by Ju Li-chyun
http://www.wantchinatimes.com/news-subclass-cnt.aspx?id=20110420000058&cid=1102
Fueled
by sales in China, Shares in Burberry reached an all-time high on Tuesday (Apr.
19), reporting a 30% rise in revenue to 860 million pounds in the second-half
of the fiscal year.
Burberry,
a 155-year-old British luxury fashion house best known for its handbags and check
designs, is also looking forward to full-year profits of between 279 million to
300 million pounds at the top end of the market's expectations, according to
Chief Financial Officer Stacey Cartwright.
Burberry
has extended its brand ownership over the past few years. It added 50 Chinese
franchise stores to its retail business in July 2010 at a cost of 70 million
pounds and now owns and controls its entire store portfolio in China, where
same-store sales grew around 30% in the second half of the year.
In
addition, it plans further expansion in 2011 by increasing selling space by up
to 13%. Most of this will be in China, Latin America and the Middle East,
according to Dow Jones news.
Luxury
retailers have enjoyed a strong rebound in their fortunes after the global
financial crisis in 2009, driven by growth from emerging markets, particularly
China and its luxury consumers who purchase goods overseas.
The
earthquake, tsunami and ensuing nuclear crisis in Japan last month struck a
huge blow to luxury industries as the country represents around 23% of the
world market for hard and soft luxury goods compared with the United States and
Europe at 25% each and China at 13%, according to MF Global, a broker-dealer.
However,
Burberry's profits from Japan were little affected because they mainly come
from the company's licensing business instead of in-door operations.
In
fiscal 2010, Burberry reported licensing sales of 97.5 million pounds which
generated 82.2 million pounds of operating profit, around two-thirds of which
came from Japan.
Japan
accounts for around 18% to 20% of Burberry's pre-tax and pre-interest earnings,
said Royal Bank of Scotland analyst John Guy to the press.
What do you mean "Burberry's profits from Japan were little affected because they mainly come from the company's licensing business instead of in-door operations"?
ReplyDeleteWhat do these terms mean?
Also are all your facts and statistics taken from the link at the top of the blog?
In Japan Burberry taken authorized to operate, you must get company's licensing then you can sell Burberry product. Get company's license require low capital investment and operating profit. Signed a license agreement is wise, because it can bring stability to the licensing fees for Burberry.
DeleteNot all facts and statistics from this article, also from other reference. In my last article 4.1, I have shown all the references already. This is just one, I put it all content here for discussion, not written by myself.
that was a nice story but i'm still got no idea how Burberry become more famous and successful recently. Can you give the strategy that making Burberry is become successful brand?
ReplyDeleteFor instance, i was looking for a wallet which I had made a decision between Gucci and Burberry with its design and price thereby it has same price, then i was checking the wallet that Burberry made in China but Gucci made in Italy, then i bought Gucci because i was wondering the quality of the wallet which i had got negative experience with a product from China.
So do you have any idea to solve this issue?
Hi Erin, maybe you miss read my last article, as mentioned above there points: when Burberry enters into the Chinese market, they pay special attention to the cultivation of brand awareness. Moreover, Burberry on the use of social media strategy is also very impressive, it is worth learning from other brands, which has established a good relationship with the customer. Furthermore, Burberry has not ignored the management and control of product quality.
DeleteAnswer you another question, clearly, luxury consumers are flipping over products and looking for that country of manufacture stamped, and if it doesn't say what they expect, they may well put it down and move on to an item manufactured in a country they associate with higher quality.
For me, I will also do some choose, but don’t forget this is luxury brands, if I make Burberry more expense than Gucci, for example, same wallet, same design, Burberry $300 made in China, but Gucci $200 made in Italy, trust me, Burberry will be more popular, customer will forget the place element, because this is luxury products, the more expensive the better it sells.
Sorry i'm not finish reading your article yet. Actually i bought Gucci wallet $300 as i said it was a same price then i had chosen Gucci because it mead from Italy where i can surely trust the quality of product rather than its luxury product. Furthermore, i had checked many bags in Burberry shop are made in China which it pretty affects my feeling, why i have to pay $1300 bag that made from China. As i mentioned earlier, i got the bad experience with the product made from China. For me, i'm quite considering all elements, which the popularity is not adequate for ignored other factors.
ReplyDeleteIn fact, I also have a certain fear which the products made in China o(╯□╰)o, this is an inevitable problem, made in Chian not always welcome. So as I said luxury brands must strengthen quality control, to avoid the brand effect due to the place of origin.
DeleteFor me, I think Made in Italy is not meant necessarily or high quality. From my blog 1.2 part the news said, imported from Italy Gucci also face quality problems, you can find details from the second paragraph.
Actually, I think Made in Germany is reliable (*^◎^*).
I have found a link: http://www.bloomberg.com/apps/news?pid=newsarchive&sid=a1S75x5U0iGc&refer=home
ReplyDeleteThe title of this information is: Even Made in China, a Burberry Is Still British
I remember that in your first post, I have mention that some of the Burberry products' are made in China. Do you think is it the reason why products from Burberry are cheaper than LV, Channel or other luxury brands?
And also the reason why China can success takes Burberry shares higher? Is it because the cost are lower than other brands?
I have been to Ginza, Tokyo. There is a Burberry store and that is the largest one I have even seen. It seems that Burberry is very popular in Japan so maybe the operation mode will be different from other countries just like what you mentioned.
For LV, Channel or other luxury brands, they also have some products’s made in China. It is difficult to say Burberry is cheaper than LV or other. You can check the price on Burberry homepage, their products never cheap, at least, I think so.
DeleteFrom my perspective, the price is not the main reason for Burberry gain the success in China, but may be one reason which need to do further research.
Thanks a lot for sharing this amazing knowledge with us. This site is fantastic. I always find great knowledge from it. Luxury Branding Service Provider
ReplyDelete