What a difference a year makes for Burberry. In September 2023, the British luxury fashion house was the talk of London Fashion Week, with elaborate promotions and a high-profile presence that saw them rebrand Bond Street underground station as “Burberry Street.” Fast forward to September 2024, and the once-flourishing label now grapples with a stark reality: three profit warnings, a new CEO, and a decline in market capitalisation from nearly £10 billion to around £2 billion.
The recent fashion show at the National Theatre, creatively directed by Daniel Lee, epitomized this new chapter for Burberry. While the event lacked the pageantry of previous years, it showcased Lee’s intention to pivot back to the company’s roots in outerwear, particularly its iconic trench coat. This strategic shift suggests Burberry will focus on its traditional strengths rather than pursuing an aggressive expansion strategy, reminiscent of key competitor Ralph Lauren, rather than aiming to emulate an all-encompassing luxury giant like LVMH.
Josh Schulman, the recently appointed CEO, has indicated that his vision for Burberry centers on restoring brand equity. His remarks after the show pointed toward balancing high fashion with more accessible price points. By widening the range of prices, Schulman aims to recapture the core customers that may have drifted away amid rising prices and a changing retail landscape. However, navigating this dual-price strategy could present a challenge, as blending premium items with more affordable options might confuse consumers.
Burberry’s latest runway featured fewer bags, signaling a potential downshift in accessory ambitions after Akeroyd’s heavy investment in this category. Instead, the focus on outerwear aligns with Burberry’s historic identity, suggesting that the brand sees more competitive opportunities in this space, especially against high-end rivals like Moncler, which is noted for its premium outerwear.
Nevertheless, several hurdles remain. The luxury market’s recent downturn in China, which previously accounted for 40% of Burberry’s sales, poses a challenge for Schulman’s plans. The luxury sector is currently witnessing a shift with younger consumers, particularly Gen-Z, gravitating towards brands that can offer a sense of community and relatability. Tapestry’s Coach brand, for instance, has skillfully attracted younger shoppers with products that resonate with current trends.
Given these burgeoning challenges, one possible salvation for Burberry could be found in nostalgia. The recent reunion tour of the iconic Britpop band Oasis has triggered a revival of interest in the 90s British cultural wave. Lead singer Liam Gallagher, who is known for championing Burberry fashion during the band’s heyday, is once again in the spotlight, sporting the brand’s signature checks. This cultural moment aligns perfectly with the “#Britishcore” trend flourishing on TikTok, where a mix of nostalgia and modern aesthetics resonates strongly with younger audiences.
Schulman’s strategy might benefit from leaning into this cultural revival. Engaging the Gallagher brothers by featuring them in future campaigns or even providing them with wardrobe for their upcoming tour could bring significant visibility to the brand. Such partnerships may stimulate interest in the label among Millennial and Gen-Z consumers who are increasingly seeking brands that marry affordability with cultural relevance.
Yet, Schulman is unlikely to retain Daniel Lee as the head designer if the brand shifts focus towards more attainable offerings. The risk is that a less luxurious image could alienate current high-end consumers who expect premium quality when engaging with the Burberry brand.
If these strategic pivots fail to rejuvenate Burberry’s momentum, speculation around potential buyouts could arise. Entities such as Tapestry—which faces hurdles with its proposed acquisition of Capri Holdings—may be on the lookout for consolation prizes, especially as Burberry has substantial cash reserves to weave potential into an attractive merger or acquisition deal. Mike Ashley’s Frasers Group, with its established interest in luxury retail, might also find value in a weakened Burberry, especially if the brand can be positioned to service his upscale boutique chain, Flannels.
Without the revival of a distinctly British cultural presence through Britpop or a significant bid from potential buyers, Burberry risks drifting into obscurity. As Schulman charts a new course, the brand’s success may hinge on its ability to adapt to current market realities while leveraging the past, creating a fresh narrative that resonates with consumers across generations.
