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Burberry: From Plough Horse to Thoroughbred?

For some time I’ve wanted to write an article about the change in Burberry as a business, about the time I had a lecture with Christopher Bailey, which was the same week I attended a Q&A with Colin McDowell (who talked about Burberry), and the time I went to Burberry AW ’10 at LFW.

As of yet I haven’t got around to it. I know, I’m hopeless. So, for now, there’s this rather great article from The Business of Fashion:

LONDON, United Kingdom — Fourteen years ago, Burberry was all but put out to pasture, suffering from a dusty image and its logo being pasted on cake tins, doilies and aprons. Rose-Marie Bravo was put in the saddle and took Burberry for a ride down Chav lane to the gates of the luxury racecourse. Despite doing a great job in fixing Burberry over her nine-year tenure, setting the foundations for her successor and consistently beating market expectations, the jury was still out as to whether Burberry could ever become a thoroughbred luxury brand.

The next phase of growth was spearheaded by Angela Ahrendts, who joined Burberry in 2006. Since her arrival Burberry has galloped to the top of the luxury valuation leaderboard, more than doubling in turnover and market capitalisation to £1.5 billion and £5.8 billion respectively, twice the rate of growth of LVMH’s turnover and market value over the same period.

The recent results announcement was very strong with revenue growth of 27 percent and operating profit increasing 37 percent. However, initial market reaction was muted by the company’s warning that more investment was required in its flagships and that margin growth would suffer in the short term as a result.

In this article we will examine how far the brand has come, where the potential for growth lies and what pitfalls it may encounter along the way.

Read more after the jump or read in full on the BoF website, here

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