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from the Times :
New boss must step up the luxury at Burberry
Angela Ahrendts is expected to boost the company by decreasing its reliance on clothes. Richard Fletcher reports
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WHEN the feisty New Yorker Rose Marie Bravo arrived in London in 1997 to revive Burberry she found an unloved brand and a company in disarray.
Its headquarters was a few rag-bag offices above the company’s raincoat factory in a dowdy corner of the East End of London. When her Italian-American parents visited the place, they were concerned about her safety.
When Angela Ahrendts, a fellow American, arrived in London in January she found a very different company. In July Ahrendts will take over as Burberry’s chief executive.
Burberry has moved out of its Hackney headquarters and converted its Haymarket store, which first opened in 1891, into a chic showroom and head office.
The elegant building, which houses a Burberry archive among the bleached-wood staircases and carved lift doors, has, like Burberry itself, been restored to its former glory.
Under Bravo, sales have increased fivefold from £164m in 1997 to £715m in 2005, while Burberry’s market value has increased from less than £200m to almost £2 billion.
Yet, despite the transformation, Ahrendts still has plenty to do if Burberry is really to challenge Gucci and Louis Vuitton as a global luxury brand.
Later this week City analysts and shareholders will, for the first time, have an opportunity to quiz Ahrendts on her plans when Burberry announces full-year results.
For Bravo, Thursday’s results will be her last as chief executive before she steps up to the specially created post of vice-chairman.
During her reign as chief executive, Bravo reinvigorated what had become a stale brand with a predominantly male customer base.
Within weeks of arriving at Burberry, the former president of Saks Fifth Avenue brought in the celebrated fashion photographer Mario Testino and signed up the catwalk model Stella Tennant. But on the day of the first shoot, Bravo had one small problem: she had no new clothes to drape over the striking British supermodel.
“All we had were raincoats. I remember saying ‘just get me some pretty pictures of the coat’,” said Bravo in a rare interview.
By the end of 1998, however, Burberry and its ranges were being lauded by the fashion press, although for Bravo the first milestone came in 2000 when she opened a store in New Bond Street.
Bravo went on to create three distinct ranges at Burberry: Prorsum, an international high-fashion line; Burberry London, the core collection that accounts for most of the sales; and Thomas Burberry, a younger, more casual collection. But it was not only the Burberry brand that needed an overhaul; the business itself was in disarray.
The distribution was haphazard. Burberry’s range was being sold in more than 60 stores, but you couldn’t buy the brand in Selfridges, Harvey Nichols or Harrods, the key London fashion shrines.
Bravo wrestled back control of vital markets such as Spain, Japan and Asia from franchisees by renegotiating and buying back licences. The company also opened landmark stores in Barcelona, Milan, New York and Knightsbridge.
While transforming the Burberry brand, however, Bravo could never get passionate about systems, according to analysts. Ahrendts is expected to concentrate more on the business side.
“The business has to catch up with the growth of the brand,” said one rival. “She needs to focus on the supply chain and sourcing.”
Ahrendts certainly has the experience to tackle Burberry. In New York she is considered a veteran fashion business executive who has proved herself twice by turning slow-moving fashion companies into sleeker models.
The daughter of a model, Ahrendts grew up in New Palestine, Indiana, where she dreamt of a big-time fashion career. She was so determined to cut it in the fashion business that she moved to New York the day after she graduated from Indiana’s Ball State University in 1981.
She began her career at Donna Karan and worked her way up the ranks, eventually serving as president of the upmarket Donna Karan Collection.
After a brief stint at the retailer Henri Bendel, Ahrendts joined Liz Claiborne in 1998, rising to become vice-president with responsibility for menswear and womenswear ranges, which include DKNY Jeans and Lucky Brand.
At Liz Claiborne, Ahrendts was ranked the fifth most powerful woman in fashion by Time magazine. She was responsible for the clothing craze that led to celebrity bottoms from Madonna’s to Jennifer Lopez’s being clad in the luxurious velour of the Juicy Couture tracksuit.
So what is Ahrendts expected to do at Burberry? City analysts expect her to reduce the company’s reliance on wholesalers. She will also focus on opening wholly-owned stores and expanding into emerging markets such as China, Russia and Brazil as well as developing penetration in India, where Burberry already has a number of stores.
“We are expecting evolution, not revolution,” said one retail analyst.
In the long term, some analysts believe that Burberry could also look at acquiring a number of small niche brands, particularly in the accessory or shoe market.
Decreasing Burberry’s reliance on clothes — with their exposure to abrupt changes in fashion — is also important if Ahrendts is to persuade the City to value the firm as a luxury-goods company rather than as a retailer.
The rating is a key issue for shareholders. Despite its success, Burberry’s valuation is still closer to a retailer than a luxury-goods company — the latter trade on much higher price/earnings ratios.
Ahrendts has a pay package that could give her £18m over five years, so Burberry shareholders are expecting results. What they say about Ahrendts
‘She’s professional, she’s smart, she has talent, vision and a common sense approach. And Burberry is lucky to have her’
Fred Wilson, chief executive of Saks Fifth Avenue, one of the top American fashion department stores
‘This is a perfect next step for Burberry. She is a terrific leader with the ability to drive the creative team’
Glenn McMahon, US president Dolce Gabbana ‘She has an inspirational, motivational style and will be a great cultural fit for Burberry’
Rose Marie Bravo, chief executive of Burberry
(source: timesonline.co.uk)
New boss must step up the luxury at Burberry
Angela Ahrendts is expected to boost the company by decreasing its reliance on clothes. Richard Fletcher reports
WHEN the feisty New Yorker Rose Marie Bravo arrived in London in 1997 to revive Burberry she found an unloved brand and a company in disarray.
Its headquarters was a few rag-bag offices above the company’s raincoat factory in a dowdy corner of the East End of London. When her Italian-American parents visited the place, they were concerned about her safety.
When Angela Ahrendts, a fellow American, arrived in London in January she found a very different company. In July Ahrendts will take over as Burberry’s chief executive.
Burberry has moved out of its Hackney headquarters and converted its Haymarket store, which first opened in 1891, into a chic showroom and head office.
The elegant building, which houses a Burberry archive among the bleached-wood staircases and carved lift doors, has, like Burberry itself, been restored to its former glory.
Under Bravo, sales have increased fivefold from £164m in 1997 to £715m in 2005, while Burberry’s market value has increased from less than £200m to almost £2 billion.
Yet, despite the transformation, Ahrendts still has plenty to do if Burberry is really to challenge Gucci and Louis Vuitton as a global luxury brand.
Later this week City analysts and shareholders will, for the first time, have an opportunity to quiz Ahrendts on her plans when Burberry announces full-year results.
For Bravo, Thursday’s results will be her last as chief executive before she steps up to the specially created post of vice-chairman.
During her reign as chief executive, Bravo reinvigorated what had become a stale brand with a predominantly male customer base.
Within weeks of arriving at Burberry, the former president of Saks Fifth Avenue brought in the celebrated fashion photographer Mario Testino and signed up the catwalk model Stella Tennant. But on the day of the first shoot, Bravo had one small problem: she had no new clothes to drape over the striking British supermodel.
“All we had were raincoats. I remember saying ‘just get me some pretty pictures of the coat’,” said Bravo in a rare interview.
By the end of 1998, however, Burberry and its ranges were being lauded by the fashion press, although for Bravo the first milestone came in 2000 when she opened a store in New Bond Street.
Bravo went on to create three distinct ranges at Burberry: Prorsum, an international high-fashion line; Burberry London, the core collection that accounts for most of the sales; and Thomas Burberry, a younger, more casual collection. But it was not only the Burberry brand that needed an overhaul; the business itself was in disarray.
The distribution was haphazard. Burberry’s range was being sold in more than 60 stores, but you couldn’t buy the brand in Selfridges, Harvey Nichols or Harrods, the key London fashion shrines.
Bravo wrestled back control of vital markets such as Spain, Japan and Asia from franchisees by renegotiating and buying back licences. The company also opened landmark stores in Barcelona, Milan, New York and Knightsbridge.
While transforming the Burberry brand, however, Bravo could never get passionate about systems, according to analysts. Ahrendts is expected to concentrate more on the business side.
“The business has to catch up with the growth of the brand,” said one rival. “She needs to focus on the supply chain and sourcing.”
Ahrendts certainly has the experience to tackle Burberry. In New York she is considered a veteran fashion business executive who has proved herself twice by turning slow-moving fashion companies into sleeker models.
The daughter of a model, Ahrendts grew up in New Palestine, Indiana, where she dreamt of a big-time fashion career. She was so determined to cut it in the fashion business that she moved to New York the day after she graduated from Indiana’s Ball State University in 1981.
She began her career at Donna Karan and worked her way up the ranks, eventually serving as president of the upmarket Donna Karan Collection.
After a brief stint at the retailer Henri Bendel, Ahrendts joined Liz Claiborne in 1998, rising to become vice-president with responsibility for menswear and womenswear ranges, which include DKNY Jeans and Lucky Brand.
At Liz Claiborne, Ahrendts was ranked the fifth most powerful woman in fashion by Time magazine. She was responsible for the clothing craze that led to celebrity bottoms from Madonna’s to Jennifer Lopez’s being clad in the luxurious velour of the Juicy Couture tracksuit.
So what is Ahrendts expected to do at Burberry? City analysts expect her to reduce the company’s reliance on wholesalers. She will also focus on opening wholly-owned stores and expanding into emerging markets such as China, Russia and Brazil as well as developing penetration in India, where Burberry already has a number of stores.
“We are expecting evolution, not revolution,” said one retail analyst.
In the long term, some analysts believe that Burberry could also look at acquiring a number of small niche brands, particularly in the accessory or shoe market.
Decreasing Burberry’s reliance on clothes — with their exposure to abrupt changes in fashion — is also important if Ahrendts is to persuade the City to value the firm as a luxury-goods company rather than as a retailer.
The rating is a key issue for shareholders. Despite its success, Burberry’s valuation is still closer to a retailer than a luxury-goods company — the latter trade on much higher price/earnings ratios.
Ahrendts has a pay package that could give her £18m over five years, so Burberry shareholders are expecting results. What they say about Ahrendts
‘She’s professional, she’s smart, she has talent, vision and a common sense approach. And Burberry is lucky to have her’
Fred Wilson, chief executive of Saks Fifth Avenue, one of the top American fashion department stores
‘This is a perfect next step for Burberry. She is a terrific leader with the ability to drive the creative team’
Glenn McMahon, US president Dolce Gabbana ‘She has an inspirational, motivational style and will be a great cultural fit for Burberry’
Rose Marie Bravo, chief executive of Burberry
(source: timesonline.co.uk)
