United Kingdom-based Burberry is reportedly facing the challenges of being a luxury brand whose image is not as upmarket as some of its rivals as well as being an independent brand at a time when many others are part of conglomerates.
As a result, its performance is lagging that of many other luxury brands, The Wall Street Journal (WSJ) reported Friday (Sept. 30).
Burberry is seen as neither mass market nor as upscale as some competitors, so its products are often sold at a discount, according to the report.
Plus, like other independent luxury brands — of which there are only a few — Burberry is being outspent on digital marketing by its bigger rivals and doesn’t have the leverage they have when negotiating to buy advertising or rent retail space, per the report.
These challenges show in the company’s performance, with its stock trading at 20% less than the average of others in the luxury space, its retail sales in 2021 coming in flat compared to 2019 while those of its rivals were up 20%, and its stock returning less to shareholders than other luxury brands, the report stated.
PYMNTS has reached out to Burberry for comment.
The report comes as Burberry brings in a new chief creative officer, Daniel Lee, who is to start Monday (Oct. 3). Lee was recently with Bottega Veneta, “where he helped reinvigorate the Italian luxury brand,” Burberry said in a press release.
“Daniel is an exceptional talent with a unique understanding of today’s luxury consumer and a strong record of commercial success, and his appointment reinforces the ambitions we have for Burberry,” Burberry CEO Jonathan Akeroyd said in the release.
PYMNTS reported in January that Burberry was making progress in its planned exit from markdowns at its stores and website.
Read more: Luxury Retailers Defy Slump, as Full-Price Sales Reflect Pent-up Demand
During the quarter ended Dec. 25, 2021, the company’s full-price sales rose 26% versus comparable 2019 levels, Burberry said at the time.
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