Luxury Good and Burberry

4793 words 20 pages
BURBERRY

COMPANY BACKGROUND

1856, Burberry was founded, when 21-years old Thomas Burberry opened a draper’s shop in Basingstoke, England. Shortly thereafter he invented gabardine, a waterproof and breathable fabric that quickly become the fabric of choice for anyone venturing out into extreme conditions. Burberry’s trench coat was chosen to be the official coat of the British army in World War I.
1920, The Burberry check pattern-a camel, black, red, and white plaid design-was introduced as a lining to its signature trench coat and became a registered trademark. Over the ensuing years, celebrities, well-known adventurers, and politician were often seen in the Burberry ”check”. Burberry’s original designs and uncompromising quality
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For this reason, Burberry’s competitive position is sustainable, as they have a decent demand for both accessories and apparel.

Exhibit 1. Top 10 Global Luxury Goods Players
(market share by sales, 2001) Players 2001 LVMH 14.4%
Polo Ralph Lauren 9.1%
Richemont 6.4%
Burberry 5.2%
Gucci Group 4.4%
Swatch Group 4.3%
Chanel 3.7%
Giorgio Armani 3.5%
Rolex 3.2%
Tiffany 3.1%

Source: Adapted from Merrill Lynch estimates, based on aggregate consolidated revenues of the top 100 luxury good players.

Exhibit 2. Accessories and Apparel Sales for Top Luxury Brands (2001; Brand sales for Burberry, Hugo Boss; Wholesale sales for Polo Ralph Lauren; consolidated sales for all others in EURmn) EUR (mn) Estimated Market Share Accessories
Louis Vuitton 2,640 23%
Gucci Division 1,394 12%
Hermes 945 8%
Coach 705 6%

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