Burberry at the crossroads

Things don't seem to be going well for Burberry: despite efforts, the revival led by Daniel Lee struggles to touch the hearts of consumers who, not surprisingly, bought trench coats and scarves this year, but ignored the ready-to-wear collections. According to statements, the brand recorded a pre-tax profit of £383 million for the fiscal year ended March 30, a 40% decrease compared to the £634 million of the previous 12 months, which occurred amidst a general slowdown in luxury goods demand in Asia and America. In a chain reaction, the company's stock price fell by 3% in early trading, before partially recovering to 1.5%, still 53% lower than the same period last year. Total sales for the year decreased by 1%, but the second half of 2023 saw an 8% annual decline, and brand managers expect a challenging first half of 2024, with some hope of recovery by late summer. In a profit warning in January, which forecasted operating profits between £410 and £460 million, the brand attributed the decline to the cost of living and higher interest rates - but perhaps Burberry's current trajectory teaches us what happens when the brand's perception of itself doesn't match the public's image. There's a lot to risk by being outdated, but perhaps there's an even greater risk in updating too much.

Speaking to The Guardian, Yanmei Tang, an analyst at Third Bridge, stated that "Burberry is struggling to clearly define and elevate its brand identity, resulting in confused messages and sluggish sales growth. There's too much reliance on a new creative direction rather than operational changes." So, even though the brand's most visible output is Daniel Lee's work, it doesn't solely depend on that, but also on the mechanisms of a business that is indeed solid due to its long heritage but also needs to update operationally. However, the feeling is that aside from operations, this drastic decline is due to an excessive desire to adjust an aesthetic that, until Christopher Bailey's departure, perhaps needed refreshing but not radically overturned - especially in a period when the vintage world, where Burberry's presence is so strong, is experiencing a resurgence. As a famous online meme says, in short, reject modernity, embrace tradition. Perhaps when the brand hired Lee, they expected a "Bottega effect" without realizing that when Lee arrived from Bottega Veneta, the brand was essentially a blank canvas aesthetically - which allowed Lee to revolutionize its aesthetics while remaining focused on leather. However, things are different for Burberry: its image is traditional, classic; and a more folk approach (think of English designers like Luke Edward Hall or S.S. Daley) was perhaps what the public and press expected. But this isn't the first time the English brand has stumbled.

When did Burberry's problems start?

In July 2020, in the midst of a pandemic, Burberry made news by announcing a massive restructuring plan. This move was a response to a drastic 75% decline in sales in the EMEIA region (Europe, Middle East, and Africa) in the midst of the pandemic, to which Marco Gobetti reacted by cutting staff and closing offices. When a company attributes its poor performance solely to external factors like market challenges and changes in consumer behavior, it often masks internal problems, usually managerial, administrative, and brand equity and perception issues. According to Jing Daily, this difficult time was due to Christopher Bailey, who became CEO of the brand after being its creative director since 2001, taking over the old position of Angela Ahrendts, usually considered responsible for the brand's revival in the early 2010s before moving to Apple in 2014. Despite initial investor optimism in 2018, with Bailey's departure and Ricardo Tisci's entry as the new creative director, the brand continued to face obstacles. Amidst a tenure unconvincing to critics (and evidently also to sales), Burberry resorted to heavy discounts during the pandemic, a move that for many had strong repercussions on the perceived value of the brand and resulted in greater consistency in its losses compared to other brands at the end of the lockdowns.

But what isn't working?

According to Jing Daily, the brand's storytelling has ceased to work because it's too based on history and not enough on values. And while respecting the analysis offered by the publication, perhaps it's necessary to dissent. The main feeling is that Burberry's administrators don't have the same idea of the brand that the public seems to share: the mistake was to take the brand and try to make it follow an identical model to everyone else's, with the launch into streetwear, the presentation of a sneaker, a monogram, and so on. But Burberry's charm has never been its contemporaneity but its classicism; the mistake was in attempting to modernize the brand in a historical context (around 2018) when the streetwear world itself was starting to feel the charm of retro aesthetics. To reposition itself, Burberry didn't need to replicate the Givenchy model of Tisci or Phoebe Philo's hyper-modern designs; but to create a warm, comfortable, and familiar aesthetic following the lead of Aimè Leon Dore. Even those who don't love Teddy Santis's brand must admit that not only did his imagery precede the explosion of vintage and retro aesthetics, but also that the styling of the lookbooks, so full of scarves, hats, sweaters, and familiar clothes but paired with a modern sensibility, would better express the charm that Burberry still possesses.

Even the Internet joked about it a few years ago when Casual Connoisseur created a fake campaign that went viral in which the 1980s template of the brand's "The Burberry Look" campaigns was used with a photo from the 2009 movie The Firm in which a hooligan wields a baseball bat wearing one of the brand's trench coats. It was precisely that almost vintage air, that image of a suburban boy who immediately appeared more refined wearing an old trench coat that captured the imagination of the Internet audience. It was precisely that aesthetic halfway between cottagecore and preppy oxfordian, that English countryside imagery that gave depth to the brand: in hindsight, if Burberry had jumped on that train early instead of on the streetwear and quiet luxury one late, perhaps things would be different today. More than modern, Burberry should be a reassuring brand. Especially since, at present, the market is already full of "overpopulated" luxury brands following in the footsteps of great trendsetters – it's not necessary for another brand as iconic as Burberry to decide to reinvent itself, but rather to become even more strongly itself.