Riccardo Tisci - Designer

[Benn98]

Burberry skeptics still dominate as Gobbetti seeks turnaround

TUE, DEC 18, 2018 - 4:44 PM

Burberry Group Plc Chief Executive Officer Marco Gobbetti and star designer Riccardo Tisci may be the saviors who finally deliver on the UK trench-coat maker's long-promised turnaround. Analysts aren't buying it yet.

[GENEVA] Burberry Group Plc Chief Executive Officer Marco Gobbetti and star designer Riccardo Tisci may be the saviors who finally deliver on the UK trench-coat maker's long-promised turnaround. Analysts aren't buying it yet.

Burberry is running neck and neck with Hermes International for the dubious distinction of being the lowest ranked by analysts among Europe's 10 biggest luxury and apparel stocks, according to data compiled by Bloomberg. The stock has 16 hold recommendations, four sells and only three buys, the data shows.

Shares of Burberry have fallen 4.6 per cent this year through Monday and are hovering at about the same level as mid 2017, when Gobbetti took the helm of the London-based company. Protracted weakness in the share price could end up making Burberry a takeover target, some analysts say.

The share performance and analysts' skepticism show that the new team hasn't yet convinced the market that it's given Burberry the boost it needs, just as the broader luxury industry faces the prospect of slowing economic growth globally and weaker demand from Chinese consumers.

"Gobbetti has inherited a very challenging situation," Flavio Cereda, an analyst at Jefferies International Ltd., said in a telephone interview. "If all goes well, there could be some positive signals at the end of next year, but in a market that's slowing down, the risk is that it takes longer."

Gobbetti has pulled together a good team and is making the right choices, with Burberry starting to address its distribution problems, said Cereda, who has a hold rating. Still, the company's supply chain remains weak and brand heat on social media, considered an indicator of future performance, remains a question mark, he said. Another issue is the delay with which Tisci's creations will hit stores.

"Timing is the big issue: Tisci's debut collection isn't available in stores yet and will just start meaningfully contributing to performance towards the end of next year," Jelena Sokolova, an analyst at Morningstar who also has the equivalent of a hold rating on the stock, wrote in an email in response to a Bloomberg query.

The stock rallied after Tisci's appointment was announced March 1, reaching a high on Aug. 28, before heading down again in October amid a global market rout tied to investor worries that China, a key engine of growth, was cooling off. If there's no revival in the share price, an acquirer could pop up, Cereda said.

Burberry has told analysts that they will need to be patient. Tisci's debut runway collection will start being in stores in February and from May, all new deliveries will be his design, the company has said.

"At this stage, our strategic focus is on igniting brand heat -- starting with influencers and key opinion leaders, which will cascade to all consumers -- and I'm pleased that we have started to make some good progress on this front," Gobbetti said on a conference call last month. "But as you know, shifting consumer perception, transitioning product, and transforming our distribution will take time."

There's "no rush to get involved" with Burberry shares, HSBC analyst Antoine Belge wrote in a Dec. 3 note. "In 2019 we think the British brand will still be too fragile." He upgraded the stock to hold from reduce in October.

The Business Times

 

[Lola701]

Judging by the relative success of their B-Series, i’m quite surprise to learn that the suits are skeptics...
But I would rather see that than the arrogance from LVMH & Celine.

The price range will be very instrumental in the success of this new Burberry. If they maintained what it has been for years, great. If they goes into the extremes that was sometimes the Prorsum line...it will be more complicated.

 

[Benn98]

Also find their skepticism a bit odd, but I'm not sold on Tisci's entry. There was the palate cleansing collection which relied heavily on basics, the logo, his debut which looked solid to be honest, a lengthy strretch (in fashion terms) of nothing after that, Cara's campaign by Teller, and now the Westwood collab. That's a decent amount of opportunities for the publicity machine. My problem with all these moves though is that it's not hyped enough for Burberry by Tisci to remain on the forefront of fashion consumers, and that's problematic. Each and every time I read something about the brand, I only then realise Tisci is in fact in charge now. In an era where all the moneybag brands inhabit cult pockets in pop culture, the question is, is there space for the new Burberry? I think with time, yes. His direction could be fine tuned more into something unique. But not with a bunch of suits breathing down your neck. And the situation at Calvin Klein will magnify the scenario and pressure at Burberry for Tisci. He needs more time. Two years! Same amount of time it takes to perfect Parmesan.

 

[ghostwriter10549]

What is the point of this article? If the suits wants that this works so shut up! He just started for gods sake!

 

[Lola701]

I think that they expected that the news of Riccardo at Burberry would have an impact on sales...
It’s kinda stupid and pointless. The last few Bailey’s collections weren’t great. The products are not desirable at all...
If it didn’t sell before, it’s not going to happen now.

As you asked Ghostwriter10549, what’s the point of making those statements when his debut collection will only hit the stores in 2 months?

 

[donyan]

"At this stage, our strategic focus is on igniting brand heat -- starting with influencers and key opinion leaders, which will cascade to all consumers --
this sentence embodies everything that is wrong with Fashion today , and which might eventually be the downfall of all these brands .

 

[dodencebt]

^ Right?! Instead of focusing on desirable products that will resonate with customers, their sole strategy is getting influencers and key opinion leaders to flaunt the products in order to make customers think they're desirable. It's abominable.

 

[Mathewthew]

^ Right?! Instead of focusing on desirable products that will resonate with customers, their sole strategy is getting influencers and key opinion leaders to flaunt the products in order to make customers think they're desirable. It's abominable.

The fact that brands like Burberry has lots of costumers (especially Chinese...) which look for the items from the pictures of the Influencers and KOL... They know the brands because of them and they only buy items with Logo or the same as those celebrities, KOL... I know it's sad, but that's how they work for Burberry and they don't think about long terms sales.

 

[donyan]

The fact that brands like Burberry has lots of costumers (especially Chinese...) which look for the items from the pictures of the Influencers and KOL... They know the brands because of them and they only buy items with Logo or the same as those celebrities, KOL... I know it's sad, but that's how they work for Burberry and they don't think about long terms sales.

DOES it work though? I mean if it did, would they have to re-launch/re-boot/re-logo everything? Do people really prefer a desperate brand over a desirable or just effortlessly cool one?

 

[Benn98]

I think that they expected that the news of Riccardo at Burberry would have an impact on sales...

I think this may have been part of the deal. That his name and following would carry the hype until the clothes hit the stores. Not to rile anyone up, but before Virgil, Tisci was the star designer du jour with his streetsyle sensibilities.

 

[Lola701]

I think this may have been part of the deal. That his name and following would carry the hype until the clothes hit the stores. Not to rile anyone up, but before Virgil, Tisci was the star designer du jour with his streetsyle sensibilities.

I guess...but seriously, it’s maybe because i’m not a logo person but it’s very tacky. And in the stores, you got the feeling that it’s the only thing they are selling.
But I think Riccardo has the authority to connect with a younger audience...

I saw it with people around me who wanted to buy the pieces from the B-Series.

As you said, he was the star du jour and he is more than that to me.
He is the one who unfortunately gave birth to a lot of talentless designers: Jerry Lorenzo, Virgil Abloh...etc. He made some people believe that luxury can be a printed T-shirt and the luxury-streetwear thing is totally because of him. The magic is that his early Givenchy collections looks relevant today.

 

[YohjiAddict]

^I remember people getting worked up about his Helmut rip-offs now and then. We all were so innocent back then, had we known that Virgil and Demna were coming our way...

 

[Benn98]

He made some people believe that luxury can be a printed T-shirt and the luxury-streetwear thing is totally because of him. The magic is that his early Givenchy collections looks relevant today.

You couldn't have said it any better. Question is though, can he replicate the above for Burberry? Because I very much doubt they've hired him for his craft or skill. This is the problem when you polarise the hip scene. Money will be thrown at you to repeat it over and over like an automaton. It's like someone headhunting Alesssndo Michele in the hopes that he could deliver the same Gucci-type results. Delusional.

This type of fashion was never to my taste, but I can understand it because it in a cultural sense. The shift from literal luxury. Like I said I don't get it because I became of age and my perception of luxury started when production value formed a huge part of the final product. If you're going to sell a graffitied Gucci tshirt to me then the cotton better have been spun by emancipated Catholic Nuns. A logo isn't enough to warrant a purchase. That's not what fashion should be about.

 

[YohjiAddict]

He really was the whole package at one point, unattainable and ethereal couture for the magazines and an LVMH executive wet dream for the stores, all those tacky t-shirts selling like pancakes.

So succesful that I think he deserves the Cerulean Award for Worst Trickle Down of the Decade, that stars t-shirt he did is still mandatory uniform for many gangsta wannabes.

Let's see how far he gets at Burberry...

 

[Lola701]

You couldn't have said it any better. Question is though, can he replicate the above for Burberry? Because I very much doubt they've hired him for his craft or skill. This is the problem when you polarise the hip scene. Money will be thrown at you to repeat it over and over like an automaton. It's like someone headhunting Alesssndo Michele in the hopes that he could deliver the same Gucci-type results. Delusional.

Ahahahaha...That’s the same thing LVMH is trying to replicate with one of their old glory at what was, at one point, a cult brand...

If Riccardo went to Versace and did what he did for Givenchy, I would have said yes! He can replicate it and it’s going to be successful.

At Burberry, I find it weird. It’s very pragmatic, even too pragmatic in a way. The fact that he has to design what Bailey failed to do (believable streetwear) makes the whole thing a bit unstable.

But I think Burberry under Riccardo will be a success. Maybe not a smash hit, but a moderate, satisfying success. Something à la Nicolas for Vuitton: very pragmatic, product oriented and with a decent amount of fashion drama to feed the critics.
Those are two designers who did magic for then-hopeless houses and who are now tested in their capacities to design for the masses.

 

[tatouejeremie]

Ahahahaha...That’s the same thing LVMH is trying to replicate with one of their old glory at what was, at one point, a cult brand...

If Riccardo went to Versace and did what he did for Givenchy, I would have said yes! He can replicate it and it’s going to be successful.

At Burberry, I find it weird. It’s very pragmatic, even too pragmatic in a way. The fact that he has to design what Bailey failed to do (believable streetwear) makes the whole thing a bit unstable.

But I think Burberry under Riccardo will be a success. Maybe not a smash hit, but a moderate, satisfying success. Something à la Nicolas for Vuitton: very pragmatic, product oriented and with a decent amount of fashion drama to feed the critics.
Those are two designers who did magic for then-hopeless houses and who are now tested in their capacities to design for the masses.

is a moderate success enough to satisfy the shareholders? in a different company that would be ok but at burberry i think the shareholders are expecting more

 

[Creative]

I feel like his first collection for Burberry had zero hype, is it just me?

 

[YohjiAddict]

^You're right! Hedi stole his thunder...maybe next time.

 

[GivenchyHomme]

I feel like his first collection for Burberry had zero hype, is it just me?

It was quite understated, maybe too much so. It was good, but far too safe. On one end of the spectrum you had a bloody horror show (Celine) and on the other you had a blink and miss debut (Burberry). Which one took all the thunder?

 

[kasper!]

That article almost feels like a smear. His collection hasn't arrived fully in stores yet and they are already publishing an article on a skeptical tone..What did Tisci do for such a harsh critic? It is the same in 2005-2006 when he just started his career in Givenchy.