Burberry’s share price was boosted by the announcement that British designer Daniel Lee had been appointed as the British house’s new designer. Shares are up as much as 5 percent since the announcement.
Lee, who takes office next Monday, will be tasked with rejuvenating the legacy and British essence that had been forgotten under previous designer Riccardo Tisci. Riccardo Tisci’s streetwear aesthetic hasn’t managed to generate the same hype that brands like Bottega Veneta, Balenciaga and Saint Laurent are generating, although the trend-reversal strategy has worked in other areas of the company, such as increasing full-price sales.
Repeat the success of Bottega Veneta
Lee’s appointment is the first major change since Jonathan Akeroyd took over as CEO earlier this year. Burberry shareholders are hoping for a similar increase in accessory sales as during Lee’s time at Bottega Veneta. They hope the magical touch Lee showed there as he created some of the most popular handbag icons that skyrocketed sales and brand equity will be repeated at Burberry.
The return of the British perspective to Burberry will be a key focus for the house, as well as continuing the steps taken to enhance the house’s luxury offering and be seen as a true luxury brand. A logo upgrade under Tisci certainly brought new energy, but in other areas the brand stalled. Even raising prices does not constitute a luxury brand.
Fashion houses chasing hype can have a positive impact on sales in certain categories and seasons, but in the long run it’s easy to lose touch with heritage and its authentic raison d’être.
Burberry has other challenges to overcome, such as the departure of Julie Brown, its chief financial officer and operations director, for whom a successor has not yet been found. Burberry was also relatively late in investing in its own vertical integration to secure its supply chain. Opportunities such as the leather goods factory that Burberry now owns in Italy will be a focus in the short and medium term. With shoes and handbags being the key growth categories, solid investments are needed to drive innovation and product excellence.
The way to the luxury brand
Many luxury consumers will remember the days when Burberry’s ubiquitous check was everywhere, including in discount and smaller stores, and touted by reality stars. In the minds of these customers, it takes a while to get used to recognizing the house as a real luxury provider. In many markets, owning a Burberry handbag continues to be valued differently compared to a Chanel or Bottega handbag.
This translated and edited post previously appeared on FashionUnited.uk.