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rffrydr
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 Posted: Sun Jul 01, 2007 7:36 am Post subject: Burberry |
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A rose my any other name.... The last vestiges of pre-globalization. Nonetheless it is surprising to me that there isn't more protests in the way of not buying at all.
| Quote: | Byline: CHRIS BRYANT
A protest that started out in Wales threatened to snowball into an international movement yesterday as campaigners gathered outside Burberry stores across the world to try to convince the luxury goods brand to reconsider the closure of its Rhondda Valley factory.
Protesters gathered in London, Paris, New York, Chicago and Las Vegas on Valentine's Day in a last-ditch attempt to save 300 jobs. "Stop Burberry breaking our hearts," was the message on cards being pressed into customers' hands outside stores.
It was the latest instalment in a campaign, organised by the GMB union, which has seen celebrities including Emma Thompson, Sir Tom Jones, Charlotte Church - comedian Ben Elton joined the ranks yesterday - and Ioan Gruffudd appeal for the factory to be saved.
The public relations challenge in Burberry's own back yard is casting a shadow over the brand which has reinvented itself from a small, staid British label into a world-class luxury goods company in the past decade.
While the British market is not central to the company's growth strategy - it sells less than 10 per cent of its product in the UK - Burberry has traded heavily on its Britishness as part of its revival. The union and Chris Bryant, the Rhondda MP who has waded into the campaign, say that this is exactly why Burberry should not close its UK manufacturing operations.
"It's just distressing to see a company with such a strong British brand destroying the brand in this way," he says, arguing that Burberry's decision to move manufacturing abroad will damage its corporate identity.
But the battle reflects the bigger tensions emerging as textile manufacturing moves to the fast-growing economies of China, India, Vietnam and Turkey. It is an issue that has divided the European Union between the more protectionist nations of southern Europe and the free-trade advocates of the northern economies.
Over the past decades British brands have been shifting their manufacturing overseas. Marks and Spencer, the high street chain which plays up its British heritage in its overseas franchises, moved its production out of the UK in the 1990s and now sources from a range of emerging economies. In fact, Burberry is unusual in that it has any UK manufacturing left at all.
Stacey Cartwright, Burberry's finance director, was unrepentant about the decision to close the factory when she spoke to the Financial Times earlier this week. "Ultimately if a factory isn't commercially viable you have to take the decision to close . . . that's what your obligations to your shareholders dictate," she said. "We've hung on in longer than anyone else."
Three-quarters of Burberry polo shirts are already being made overseas and Burberry wants to consolidate production in these locations.
"Because we're not making the 25 per cent of our polo shirts that were once made in Britain, that suddenly makes us 'non-British'? It doesn't make sense," argues Ms Cartwright.
But while cheaper Burberry products such as polo shirts are made in places such as Spain and Hong Kong, Burberry is still clinging to its British heritage for its higher-end garments. Its world-famous trenchcoats and other outerwear are still made in the UK.
"The consumer values a true 'Made in England' trenchcoat," she says.
However, the protests, coming so soon after the brand was connected with 'chav' culture, are unwelcome. Ms Cartwright refused to comment on whetherthe protests are damaging Burberry. "When you know you've made the rightdecision commercially, you have to stay true to that," she says.
Burberry will next month be asked to explain to the House of Commons Welsh affairs select committee why it plans to close the factory. Campaigners have indicated the Prince of Wales has taken an interest in the issue. His disapproval of the closure could, in theory, lead to the withdrawal of Burberry's royal warrant.
Meanwhile, the company says it is trying to find alternative employment for its staff. "I think that over the course of these next days, weeks, months - however long people want to keep asking us the questions - we'll just have to keep battling back with 'these are the facts'," says Ms Cartwright. "Commercial real-ities reign."
Source Citation: Bryant, Chris. "Protesters want Burberry checked FACTORY CLOSURE.(NATIONAL NEWS)." The Financial Times (Feb 15, 2007) |
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rffrydr
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Joined: 30 Oct 2005
Posts: 16929
Location: Sunny California
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| Posted: Mon Oct 03, 2011 6:27 am Post subject: |
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One on the come, Normura, via Alphaville:
Burberry 1H results: expect +29% const FX sales growth
Burberry reports a first half trading update on Wednesday, 12 October. We expect 29% constant currency sales growth to £820m, representing 2Q sales of £453m, or growth of 26% at constant currency compared with 34% in Q1. Within this mix we assume retail comp store sales growth of 13% and reported wholesale sales growth of 9%.
NH
Expect margins down as guided, given investment weighting
We expect continued gross margin gains through mix (retail, Asia) to offset raw material cost inflation and percentage margin dilution from performance of Prorsum and London and expanding categories such as shoes and kidswear. However, Burberry has previously highlighted that operating costs (including: flagships, customer service, share schemes and China retail costs as well as space related and inflation) in the current year will be first half weighted. As a result, we look for a 50bps 1H EBIT margin decline in the key retail/wholesale division with a modest 60bps increase in the FY.
2H optical slowdown given increasingly more difficult comps
Across the luxury space, comps become increasingly more challenging in 2H. We estimate +16% 2H organic wholesale/retail sales growth (retail comp stores +6%, wholesale reported +7%), which in part accounts for 2-year comp becoming substantially more difficult in 2H vs. 1H. We appreciate that part of this is owing to the transfer of China wholesale sales into retail last year with the acquisition of franchises.
NH
Investment to drive future growth the best way of sustaining the multiple in our view
Burberry’s strategy of reinvesting underlying gains to drive further growth is working with arguably some of the greatest gains to come following this year’s flagship, creative, service and digital investments. Given the recent pullback in the shares, the stock offers some upside to our 1,356p DCF/P/E multiple based price target.
Goldman on luxury:
| Quote: | Bifurcation a theme to invest: Growth and returns of Luxury to continue to diverge
We expect the sector to deliver growth and returns at an increasing premium to the market. We forecast a
sales CAGR of 16.7% in FY11-13 (vs. 5.5% for the wider consumer sector and the luxury historical (2001-11)
average of 8%). |
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