According to a recent report in The Telegraph, British brand and retailer Burberry demonstrated a 24 per cent rise in sales to £1.9 billion and a 24 per cent increase in pre-tax profits to £366 million in its last fiscal year. Jaana Jätyri, founder of fashion trend forecaster Trendstop.com, summarised the brand's success as: "Another bumper set of results for Burberry, which has perfected democratic luxury brand positioning."
|Oasis front man Liam Gallagher and
ex-wife Patsy Kensit on the cover of
Vanity Fair's March 2007 issue.
Burberry's results are further evidence of the iconic fashion house's remarkable comeback since its trademark check design suffered from image inconsistencies during the 1990s. At a time when UK PLCs are stuck in a crisis of confidence facilitated by government austerity measures and fears of a Eurozone breakup, can the politicians who run the country be inspired by a Burberry-esque turn-around?
Since being established in 1856, Burberry has enjoyed a diverse history as a functional outerwear outfitter. The brand had its cinematic heyday in the 1940s and 1950s, when Humphrey Bogart and Ingrid Bergman made the Burberry trench coat a classic piece of style iconography. The trench rumbled its way through the 1960s and 1970s courtesy of Audrey Hepburn in Breakfast at Tiffany's. But during the 1980s, the brand's success began to hit the buffers.
Burberry had adopted a marketing strategy that extended the sale of brand licenses around the world, allowing licensees to associate the brand name with products ranging from watches to whiskey. Although it led to a significant increase in mid-term sales and pre-tax profits, there was a noticeable depreciation in the prestige associated with the once exclusive brand. By the mid-1990s, the ubiquitous Burberry tartan had become the sartorial preserve of Japanese business men and the aspirational working classes of inner city Britain. With the late-1990s economic crisis in Asia, the company was left in financial and existential turmoil.
At that time, the UK was experiencing a very different shift. A cultural movement dubbed "cool Brittania" was blossoming within British creative industries at a time of economic prosperity and a growing sense of British-ness. "Cool Britannia" was symbolised by bands such as Blur and Oasis; the Young British Artists movement that included Damien Hirst and Tracy Emin; and emerging fashion stars such as Alexander McQueen. Britain had become re-imagined as a nation that punched above its weight economically, culturally and artistically.
But today, the UK is feeling the slump in confidence experienced by Burberry in the 1990s. While the UK was (and is) still a key global player, its influence has declined steadily from the world's third-biggest economy behind America and the Soviet Union 60 years ago. The country has become an economic also-ran, positioned on the edges of Europe with a withered industrial base and an economy overly reliant on London's pre-eminence in the financial sector.
UK PLC was hit hard by the 2008 crash, mainly due to the fact that its economy was so dominated by the financial sector and intrinsically unbalanced already. Four years later, in which a Conservative-led coalition government supplanted the Labour government with a policy emphasis on "austerity," the UK economy has followed one recession with another and its main trading partner (the Eurozone) is on the verge of collapse.
According to economywatch.com, there were two periods of change that reversed that decline in recent memory. Firstly, there was the "free market" reforms introduced during the Premiership of Margaret Thatcher and secondly, Tony Blair's New Labour administration that heralded a sequence of expansion that enabled the UK to experience the longest period of growth on record that stretched from 1992 to 2008. The moniker "cool Britannia," with its cultural and sporting affectations gave a seductive background narrative to the nation's upward economic momentum and encapsulated a feeling of self-assurance within the British psyche.
Likewise, Burberry ran with the zeitgeist and used it to its advantage. In his 2008 book, Fashion Brands: Branding Style from Armani to Zara, Mark Tungate outlines Burberry's corporate decisions that resulted in its brand renaissance, starting with a change in strategy in 1997. The brand cut off the Japanese "grey" market, reined in distribution, renegotiated licenses and closed a number of smaller stores, instead refocusing on larger, more commercially important retail outlets. In conjunction with this restructuring, Burberry launched the upmarket Prorsum range of womenswear in 1999 and hired British model Kate Moss to drive the campaign.
Although these decisions initially resulted in more profit losses, ultimately they allowed the brand to tighten up its listing ship, reconfigure its branding and re-emphasis quality, exclusivity and its unique British heritage. By March 2001, Burberry announced it had nearly doubled its sales to £425 million while profits had tripled to £69.5 million, according to Tungate.
Just as Burberry pulled itself back from the brink, building a base from which to go forward on the wave of confidence in the late 1990s, the UK has found itself in a "perfect storm" of opportunity to follow the same route.
With Queen Elizabeth's Diamond Jubilee celebrations broadcast around the world, reinforcing Britain's "pomp and ceremony" so beloved of anglophiles everywhere, and the London Olympics just around the corner, 2012 is set to be the year for the UK to "re-imagine" itself into a world capital of the future.
While culture followed prosperity during the "cool Britannia" years, perhaps the UK could "do a Burberry." In an industry as permeable to economic hardship as fashion, if Burberry is able to not only reinvent itself but maintain its new footing and flourish, all on the back of opportunistic innovation in the right social climate, what's stopping Britain?
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