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Burberry Brand Heat Ignites on Tisci’s 'Drops' Amid Transition

As the UK’s largest luxury brand attempts to position itself as a true luxury player, the drops from Riccardo Tisci's runway collection are already driving excitement and shifting perceptions. But with the bulk of Tisci's work still months from hitting stores, the brand has a long way to go.
Riccardo Tisci's Burberry debut | Source: InDigital
  • Sarah Shannon

LONDON, United KingdomBurberry is working social media hard as the first items designed by new chief creative officer Riccardo Tisci trickle out, and it's generating buzz. The company says higher sales will follow.

The first Burberry "B series" drop of £290 ($380) unisex T-shirts and sweatshirts designed by Tisci sold out in 24 hours last month. Limited edition 2,100 RMB ($302) logo scarves sold exclusively on China's Tmall platform for Single's Day took just hours to sell out. Coming up: a Vivienne Westwood collaboration with a mini kilt and lace-up platforms in vintage check teased on Instagram this week.

“The initial response has been exceptional” chief executive Marco Gobbetti said Thursday at an earnings press conference in London, with triple-digit growth in brand mentions around the September London Fashion Week show and an “overwhelming” influencer response from the B series limited-edition drops.

Generating heat on social media is a major component of Burberry's plan to jump-start sluggish sales. The company replaced long-time creative head Christopher Bailey earlier this year with former Givenchy creative Riccardo Tisci. He's leading a brand-wide revamp, from updated stores to introducing streetwear influences mixed with elegance and attempting to grow Burberry's leather goods business, which lags competitors.

The majority of change is still ahead — at this stage we're focused on shifting perceptions.

On Thursday, the company reported same-store sales rose 3 percent in the six months ending in September compared with the same period in 2017, while overall sales dipped 3 percent to £1.2 billion ($1.57 billion) as the brand reduced non-luxury wholesale doors and demand for older styles stagnated. Adjusted operating profit fell 4 percent to £178 million.

“The majority of change is still ahead — at this stage we’re focused on shifting perceptions and generating brand heat,” Gobbetti said.

Indeed, while streetwear products may have sold out on Instagram and WeChat and celebrities from Rihanna to The Weeknd and Dua Lipa are snapped in the clothes, the actual volumes for these limited-edition drops are small. "It helps build engagement and excitement," Gobbetti said, particularly among millennials and new customers. As influencers post photos wearing the product, he said he expects this will eventually cascade over to consumers, with more capsules around events like Mother's Day, Chinese New Year and the summer.

Burberry’s transformation is only partially complete. So much is reliant on Tisci’s product, but his runway collection won’t begin to hit stores until February, with the full assortment not available until May. The company is also transitioning its distribution model, cutting back on US wholesale doors where the brand has traditionally been considered more affordable than luxury, and has just begun refreshing stores to give a more upmarket feel. There are 10 to 12 renovations planned this year of the 240 directly operated outlets, following on from the Regent and Bond street stores in London.

The initial response to the collection from showroom buyers has been positive with partners in Europe, the Middle East and Asia doubling their spend for runway products, Gobbetti said. To be sure, the catwalk collection is a small proportion of the overall order. He declined to comment on demand for broader collections.

Tisci's runway collection won't begin to hit stores until February, with the full assortment not available until May.

There is also still work to be done on leather goods, which the company is focusing on given Burberry's lag behind rivals like Gucci. The new design team launched the belt bag in March, and Tisci launched a limited-edition black and racing red version for the Regent Street flagship in September. However, accessories sales in the first half were unchanged from 2017. Gobbetti said Burberry is enhancing the selling environment in stores with interior displays to support the products, placing bags at the "front and centre" of outlets and expanding the offering and range.

“It is going to be a very big category for us. We continue to work on the architecture and reposition our offer but still we want to be positioned in a very competitive price. There is space for us to be slightly below some of our peers, in the top of our offer,” he said.

Burberry executives said they're not worried about a potential decline in Chinese luxury demand, brought about by crackdown on imports and slowing economic growth. While consumption patterns may have changed, with Chinese buying more in Asia — particularly Hong Kong — and Korea rather than Europe, the overall trend is stable, said Julie Brown, chief financial and operational officer.

Clues to Tisci's creative ambitions stem from his interest in London's creative community, having selected young British artist and photographer Juno Calypso, known for her absurdist and feminist self-portraits set in honeymoon hotels in Pennsylvania, to shoot and direct the brand's Christmas festive campaign featuring Kristin Scott Thomas, Matt Smith, M.I.A, Naomi Campbell and her mother Valerie Morris-Campbell. He has already commissioned British artist Graham Hudson with an installation in the London flagship on Regent Street dominating the foyer of the three-storey building, while six young creatives including graffiti artist Goodchild — who has just 2,000 Instagram followers, — and recent Slade art school graduate Isobel Napier interpreted the new Burberry monogram in their own style, posted on Instagram. Rob De Naja, from nineties trip hop group Massive Attack, designed the soundtrack to Tisci's debut show

“He loves the contradictions. A Burberry that is as much for the young as the older. He talks about inclusivity to multi-generational dressing, an attitude that is irreverent but relevant,” Gobbetti said.

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