Burberry Group

Sector: Luxury Countries of operation: Over 40 markets including Canada, China, Japan, Korea, the UK and the US Key product categories: Accessories, apparel and footwear Annual Metrics [caption id="attachment_147241" align="aligncenter" width="700"] Last fiscal year end: March 27, 2021
*Trailing 12 months ended September 25, 2021
**Numbers are as of January 19, 2022[/caption]   Summary Burberry Group plc is a manufacturer and retailer of luxury goods headquartered in London. Burberry also licenses third parties to manufacture and distribute products using Burberry trademarks. Its reporting segments are retail, wholesale and licensing. Its online business operates in 47 countries and 11 languages. Company Analysis Coresight Research insight: Like other luxury groups, Burberry has been severely impacted by the pandemic-led travel restrictions and lockdowns, which took a toll on its already declining revenues. Burberry has been attempting to transform itself over the last four years by focusing on its accessories and leather goods business, enhancing its omnichannel strategy and introducing several tech innovations, such as its high-tech social retail store in Shenzhen, China. It also acquired CF&P, a leather supplier, in 2018 to bolster its strength in the leather business. The company has also made recent leadership changes, including appointing former Versace CEO Jonathan Akeroyd as its new CEO, effective March 15, 2022. Akeroyd brings with him vast experience, which will benefit Burberry’s transformation. At Versace, he oversaw a restructuring that led to brand growth, and he previously led Alexander McQueen’s brand turnaround and global expansion. We think that Burberry’s multi-pronged approach will revitalize the group and enable it to move toward positive revenue growth in the years to come.

Tailwinds	Headwinds
Enhanced digital channels enabling better customer experience Easing of travel restrictions and gradual return to social events New and aspirational luxury shoppers looking to enter the segment	Economic uncertainty across global markets Competition from other luxury brands Rise of conscious shopping and inflation causing a decline in discretionary spending Supply-side disruptions and input cost inflation

  Strategy In fiscal 2022, Burberry has laid out five key levers to drive revenues and profits through fiscal 2024. Revenue levers:

1. Build brand advocacy and community with a social-media-first strategy featuring content starring influencers and innovative brand experiences.
2. Focus on core categories of leather goods, outerwear, ready-to-wear and shoes.
3. Drive store performance with new store concepts, such as social retail stores that blend online and offline experiences.
4. Supercharge digital sales with precision marketing, data-driven customer acquisition and loyalty expansion with digital clienteling.
5. Focus on full-price sales by cutting back on markdowns in mainline stores and emphasizing full-price channels.

Profit levers:

1. Gross margin strength through luxury pricing and replenishment
2. Full price penetration
3. Sales density
4. Digital penetration
5. Continued cost control

Burberry did not provide specific details for each of the profit levers. However, the company did state that it expects several enablers to steer its profit levers, including:

• Creating an agile supply chain focused on quality and service
• Investing in consumer-led technologies that enhance customer experience
• Attracting and retaining diverse and top-quality talent
• Maintaining operational efficiency

It hopes to achieve all this while maintaining a strong focus on environment, society and governance (ESG) activities. Revenue Breakdown (FY21) Company Developments

Date	Development
March 15, 2022	Jonathan Akeroyd, the new CEO of Burberry Group, takes office on March 15, 2022—two weeks ahead of the initially announced date.
January 17, 2022	Burberry Group refinances its Revolving Credit Facility with a £300 million sustainability-focused loan as it doubles down on its ESG efforts to become climate positive by 2040.
October 20, 2021	Burberry Group appoints Jonathan Akeroyd, Versace CEO, as the CEO and Executive Director of Burberry Group, effective April 1, 2022.
September 27, 2021	Burberry Group appoints CP Duggal as Chief Digital and Analytics Officer, effective September 30, 2021. Duggal joins Burberry after a 20-year stint at American Express.
August 4, 2021	Burberry Group launches a nonfungible token (NFT) collection in collaboration with Mythical Games in the latter’s flagship space Blankos Block Party. The NFT is a shark named Sharky B which can be bought and sold within the Blankos Block Party marketplace. Users can also buy NFT accessories, such as a jetpack and pool shoes, to apply to any NFT they own within the Blankos ecosystem.

  Management Team

• Jonathan Akeroyd, CEO
• Jérôme Le Bleis, Chief Supply Chain Officer
• Julie Brown, COO and CFO
• CP Duggal, Chief Digital and Analytics Officer
• Dr. Gerry Murphy, Chairman

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Source: Company reports/S&P Capital IQ