LONDON – Burberry is scaling new heights, with sales returning to their pre-pandemic growth rates, a sleek store concept rolling out in Knightsbridge, and a new, younger generation of shoppers snapping up sneakers, the Olympia bag and TB monogram swimwear.
Burberry has also behaved more like a luxury brand due to a strategy initiated by outgoing CEO Marco Gobbetti, who has deleted the wholesale client list, focused on full-price sales, done away with write-downs and taken ownership of leather goods .
This week he marks another milestone – the opening of a store on 1 Sloane Street between Harrods and Harvey Nichols, which is part of a new development of The Knightsbridge Estate. Burberry has snapped the key corner overlooking Brompton Road and Sloane Street and is the first tenant to occupy one of seven planned flagship stores.
Gobbetti worked with Burberry’s creative director Riccardo Tisci and prominent Italian architect Vincenzo De Cotiis on the concept, which the CEO described as a timeless – and certainly not trendy – space.
“I did not want this to be a fleeting moment,” Gobbetti said in an exclusive interview ahead of the store’s official opening this week. “This is a brand with an incredible heritage based on goods, products, icons – not trends. The store should be fresh, modern, relevant, but it should also have a timeless attitude. “He said all the house codes are there,” but I do not think there is anything in your face. “
The space, which spans 9,225 square feet over three floors, is unlike any other Burberry store and especially the beige-and-check-in temple that was once located just across the street in the early aughts.
The new space is bright and free with lots of tall, arched windows; a network of thin metal rails on floors and ceilings, some of them configured in an abstract control pattern; black-and-white chess floors and lots of mirrors that reflect the light flowing in from the street.
Near the entrance is a large room surrounded by metal rails dedicated to seasonal displays. It contains a selection of Burberry’s Olympia bags surrounded by large white plaster cast statues of Greek goddesses.
“We wanted to design this space as a portrait; stumbles through [Burberry’s] the past and analyze the present to interpret a future composed of reassuring details and unexpected perspectives, ”De Cotiis said of the approach.
Three similar stores will open later this year at Shanghai’s Plaza 66; in Paris on Rue Saint-Honoré and on Bond Street in London. By the end of the year, the brand will have renovated approximately 55 stores or half of its worldwide retail property.
The timing could not be better: Burberry has unlocked the majority of its stores after a strenuous series of lockdowns around the world, and retail sales are rising.
On Friday, Burberry said retail revenue rose 86 percent to £ 479 million in the first quarter, driven by continued strong growth in mainland China, South Korea and the Americas.
In constant exchange, retail revenue rose 98 percent in the three months to June 2, beating analysts’ projections of £ 441 million.
Sales of comparable stores increased by 90 percent compared to the first quarter last year and increased 1 percent compared to the level before the pandemic two years ago.
Burberry, which has been on a mission to eliminate discounting and reduce its sales periods, said comparable full-price sales increased 121 percent compared to last year and 26 percent compared to the pre-pandemic level.
There is no doubt that Gobbetti, who took up his role as CEO in July 2017 and who navigated the brand through the harsh sea of Brexit and COVID-19, sees his vision for Burberry come to life.
So why is he traveling and apparently so suddenly?
“Today’s results and last quarter’s results show that we have completed a very important first phase of the transformation of Burberry,” said Gobbetti.
If ever there was a good time to travel, he said it is now. “The team has an incredible energy to drive this forward and I’m sure whoever follows me will bring an even stronger energy and write a different success story for the brand.”
Asked how close Burberry has come to compete with the French-owned luxury giants – one of the goals Gobbetti set when he took over as CEO – he said: “I definitely think we’re on our way. I think there is a lot of work to be done, but we are going in the right direction. The entire offer has been withdrawn. Structurally, I think the brand can really compete now. ”
Gobbetti will remain at Burberry until the end of 2021, and the company is currently looking for his successor.
As reported, Gobbetti is returning to his native Italy and has been appointed CEO of the much smaller Salvatore Ferragamo. His job will be to rejuvenate that company on a number of levels.
Gobbetti said he is looking forward to living in Italy again.
“I have not lived a large part of my adult life in Italy – I have mostly been abroad, first in America and then in France and then Britain,” said Gobbetti, who has a bachelor’s degree from American University in Washington, DC. and a master’s degree in management from the Thunderbird School of Global Management in Phoenix, Ariz.
Early in his career, he served as CEO of Moschino and later spent 13 years at LVMH Moët Hennessy Louis Vuitton, where he was the manager of Givenchy – and recruited Tisci as a designer. Gobbetti later fell to Celine, where he worked with Phoebe Philo, who is now starting his own business with LVMH as a minority shareholder.
“I have family that I have not been close to for a while now,” he said. “I also think I will at least try to contribute to an Italian brand, support what has been a tragic experience for Italy as well as for Britain,” due to COVID-19.
“There is a strong desire in Italy to just pull the energy together and make this a new start for the country. I do not think at all that I want to make a big contribution, but I like the idea of doing it, ”he added.
Asked whether his exit would hasten Tisci’s own departure, he said it would not. “We have a very good relationship, but we can live without each other,” Gobbetti said with a smile.
Riccardo has matured and become a great designer, a great creative director. He’s really happy with where he’s on the journey, the work he’s doing for Burberry, and how he’s been able to interpret the brand. I think he is a very good place. We had a very good relationship even when I left Givenchy and he kept going. ”
In fact, Tisci remained in Givenchy for almost a decade after Gobbetti left.
Tisci has not commented publicly on Gobbetti’s move, though Burberry said Friday that he remains enthusiastic about the options, and the chance left its personal mark on Burberry. “We are very confident in Riccardo’s position,” Julie Brown, Burberry’s chief financial officer, said in the results call in the first quarter on Friday.
After spending decades in the luxury industry, Gobbetti said that during his time at Burberry, he has been hit by the “generational change” that has occurred where younger customers – especially in the United States – become associated with brands and never engage in them. before.
“I think what we’re seen over the last year or two since the pandemic is all these new, young boys and girls around the country – and not just New York and Los Angeles – but everywhere they are interested. and eager to learn, to wear, to be a part of the brands.
“Somehow the brands have become part of who they are, they help them express their personality. There are many cross-cultural connections between music, art, film, fashion and luxury, and somehow it is the references that are important to the new generation, ”he said.
Gobbetti added that social media has also allowed people to actively participate in the conversation with the brands.
“I find it fascinating – five or seven years ago it was much more limited. The audience for fashion and luxury was not as wide as it has become today. The big change is how fashion and luxury have permeated society. ”
He said that at the beginning of his career, fashion and luxury were for the wealthy few. “Now it’s available to everyone, and that’s the big change.”
Also, brands have changed in response to the new consumer, he said. They now ask themselves how they can pass on their values to the consumer, how they can relate to a wider society. Gobbetti believes that kind of social awareness is now part of the DNA of luxury brands like Burberry.
The company has experienced these changes first hand.
The Burberry Foundation has been working with youth organizations, food banks, and related organizations for years. Last autumn, it teamed up with Marcus Rashford, the leading striker for Manchester United and a member of the English national football team, which campaigns against child poverty.
Burberry and Rashford worked together to help charities that support young people in the UK and around the world. Rashford also appeared in a Burberry campaign photographed by Rafael Pavarotti and styled by Ibrahim Kamara. The Rashford-related positions became Burberry for gold dust, which attracted record-breaking engagement with the brand.
Gobbetti is remarkably humble and self-assured about his work with Burberry, especially the last two years. He helped prepare the company for a future after Brexit – an expensive and time-consuming task – and was then forced to figure out almost every day how to deal with the COVID-19 crisis.
Burberry was also one of the first – and few – bodies in the private sector to put its money behind vaccine research, an investment that would result in the Oxford AstraZeneca jab. The company was also among the first to supply PPE to hospitals and transformed its Yorkshire trench coat factories into providers of National Health Service.
Last September, the company won a £ 573,000 contract to make dresses and personal protective equipment for the UK National Health Service. The agreement with the government was in addition to the more than 160,000 pieces of PPE that Burberry produced at its trench coat factory in Castleford, Yorkshire, and donated to the NHS and charities.
During the crisis, Burberry also denied the British government hard money and lowered the leader’s salaries, though it laid off 5 percent of the workforce last year due to the pandemic’s influence.
Throughout, the team continued to produce and display collections, and Gobbetti stuck to its strategy of lifting the brand.
As markets – and China in particular – began to open up, Burberry hosted pop-up events focusing on digital marketing and sales. It also cut the ribbon in a new concept store with Tencent in Shanghai last year.
“We are animals that can be adapted. We are adapting to change, ”said Gobbetti. “There is always something that will come your way and you just have to be really agile, aware of creating the foundation that leads you forward and aware of what is around you. The pandemic has made us more considerate of the people around us and who needs help the most. ”
He also believes that the pandemic has been a major accelerator for luxury, and believes that there is “pace, urgency and speed” like never before in the company. In the old days, he said, “traditional luxury was a bit static – now is not the time to be quiet.”