OVERVIEW

From its founding in 1856, Burberry has become the leading British luxury brand globally. The brand is defined by:

Britishness Authentic outer ear heritage !istoric icons: the trench coat, trademar" chec" and #rorsum "night logo $emocratic luxury %ositioning &nno'ation and intuition The business is dri'en by:

$esign, mar"eting and retail(led strategies $igital focus and integration )hannel di'ersity: retail, digital commerce, holesale and licensing *ulti(category com%etency: non(a%%arel, omens ear, mens ear and childrens ear +lobal reach and balance: across core regions and emerging mar"ets The culture is distinguished by:

)ore 'alues: to %rotect, ex%lore and ins%ire $emocratic and meritocratic ethos )ollaboration and connectedness )ontributing to its communities, including through the Burberry Foundation ,nified and %assionate teams are res%onsible for maintaining the integrity and 'itality of this extraordinary brand hile continuing to de'elo% a business hich remains rele'ant to e'er(e'ol'ing mar"ets and consumer tastes. The follo ing %ages outline the +rou%-s strategy under each of its fi'e "ey themes.

HISTORY
1856 Thomas Burberry, a .1(year(old dra%er-s a%%rentice, o%ened a small outfitter-s sho% in Basingsto"e, !am%shire, /ngland. 1870 A commitment to 0uality and inno'ation in fabric and out ear design earned Burberry a loyal follo ing. By 1812, the sho% had gro n to an 3em%orium-. 1880 +abardine 4 the breathable, 1891 5o 1895 Burberry de'elo%ed the Tieloc"en, the %redecessor of the trench coat, hich as ado%ted by British officers during the Boer 8ar. trading as Thomas Burberry 6 7ons, the business o%ened a sho% in the 8est /nd of 9ondon at :2 !aymar"et. eather%roof and tear%roof fabric de'elo%ed by Burberry 4 as introduced in 1882.

1901 The /0uestrian ;night trademar" a%%eared for the first time accom%anied by the 9atin ord 3#rorsum-, meaning for ards. 1911 /0ui%%ed by Burberry, the 5or egian ex%lorer )a%tain <oald Amundsen became the first man to reach the 7outh #ole. 1914 )ommissioned by the 8ar =ffice to ada%t its earlier officer-s coat for ne rings, and the 3trench coat- as born. 1920 The Burberry )hec", registered as a trademar", 1955 Burberry 1989 A second <oyal 8arrant 2002 Burberry launched its exclusi'e 3Art of the Trench- made to order trench coat ser'ice. Today Burberry is an internationally recognised luxury brand ith a orld ide distribution net or". as granted to Burberry in 1>8> by !<! The #rince of 8ales. as a arded a <oyal 8arrant by !er *a?esty @ueen /liAabeth &&. as introduced as a lining to the trench coat in the 1>.2s. combat re0uirements, Burberry added e%aulettes and 3$-

BUBERRY FASHION STRATEGY AND MISSION

9e'eraging the franchise &ntensifying non(a%%arel de'elo%ment Accelerating retail(led gro th &n'esting in under(%enetrated mar"ets #ursuing o%erational excellence LEVERAGING THE FRANCHISE Through more coordinated use of brand assets and greater integration of its global organisation !urberr" has the o##ortunit" to enhance consumer res#onsi$eness and o#erate more efficientl" and effecti$el"% This #otential lies both in the front and bac&'of'house o#erations% &n .212B11 Burberry as again included in &nterbrand-s To% 122 +lobal BrandsC as a arded the .212 British +raduate 122 A ard for 38here Fashion +raduates 8ant to 8or"-C and as recognised as the 1:th most inno'ati'e com%any in the orld by Fast )om%any magaAine, as ell as recei'ing the &naugural &nno'ation A ard at the .212 British Fashion A ards. #roduct and mar"eting excellence under%in this brand momentum. ;ey highlights in .212B11 include: (ar&eting inno$ation Launched ne) !urberr"%com site The rollout of the ne Burberry.com ebsite began in the fourth 0uarter of .212B11, ith the site li'e in six languages and transactional across D5 countries by the year end. The site, "no n as Burberry 8orld, is the ultimate ex%ression of the Burberry brand, allo ing customers globally 4 in many cases for the first time 4 to connect ith all its as%ects, from heritage, to music and 'ideo, to the full %roduct offer. Through the use of dynamic audio'isual content the site becomes a %lace to engage, entertain and interact, as ell as %ro'iding the ultimate online luxury sho%%ing ex%erience through a %ersonalised customer ser'ice offer that includes the ability to )lic" to )hat and )lic" to )all in real time and in 1D languages. The site %ro'ides a %o erful locus for ongoing efforts to build the Burberry community around the orld. E*tended lu*ur" leadershi# #osition in social media /ngaging ith social media is a further critical %art of the +rou%-s strategy to connect customers ith the Burberry brand. &n .212B11, Burberry further built its leadershi% %osition amongst luxury brands on Faceboo", ending the year ith a%%roaching fi'e million fans, as ell as almost .22,222 follo ers on T itter and o'er four million channel 'ie s on EouTube. A "ey milestone in late .212B11 as the launch of the brand on )hinese social media sites 7ina 8eibo, ;aixin221, $ouban and Eou;u, ha'ing launched country(s%ecific T itter accounts in BraAil, *exico, Fa%an, Tur"ey and ;orea earlier in the year. The +rou%-s o n social media site, artofthetrench.com, continued to ins%ire %eo%le around the orld and across generations to share their ex%eriences of the iconic trench coat. By the end of the year, the site had recei'ed more than 11 million %age 'ie s since its launch in 5o'ember .22>.

Continued transformation of fashion sho)s Burberry continued to brea" ne ground in the reach and im%act of its fashion sho s. #re'iously closed door e'ents for in'ited guests, the use of li'estream technology allo ed Burberry to ta"e these "ey brand moments to an e'er( ider audience o'er the course of the year, culminating ith the li'estream of the Burberry 7%ringB7ummer .211 omens ear sho , hich has been atched by o'er one million %eo%le across more than 182 countries around the orld. The introduction of 3retail theatretechnology allo ed the li'estreaming of sho s directly to flagshi% stores globally, hile the de'elo%ment of instant digital commerce %urchase ca%ability, su%%orted by su%%ly chain inno'ation, has allo ed customers for the first time to buy directly from the run ay for deli'ery in se'en ee"s. Further inno'ations, such as the streaming of the 7e%tember .212 omens ear sho in :$ to fi'e locations around the orld, and the hosting of the AutumnB8inter .211 omens ear sho on the iconic 'ideo screens in #iccadilly )ircus, 9ondon, ha'e continued to broaden reach and a areness. Further digitisation of the brand )ontinued in'estment and an intense focus on infrastructure de'elo%ment meant the +rou% as able to accelerate the digitisation of the brand. &n .212B11, the +rou% further bolstered its orld(class creati'e and &T teams to remain at the forefront of inno'ation and excellence in the creation and distribution of digital assets.

+roduct e*cellence ,e" a##arel categories out#erformance =uter ear remains the core of the Burberry a%%arel business, from timeless iconic %ieces to inno'ati'e contem%orary styles. A "ey gro th dri'er, outer ear accounted for o'er half of mainline retail a%%arel sales in the year. At the to% end of the %yramid, fashion outer ear dro'e out%erformance from #rorsum, the run ay collection that creates the halo for the entire Burberry brand. Integrated mens)ear 7711 sa the launch of the first fully in(house global mens ear collection. !istorically a licensed business, the +rou% exited all 11 licences bet een .226B21 and .212B11, enabling the relaunch and re%ositioning of this category. This first %ure collection dro'e out%erformance in mens ear during the year, ith re%orted gro th of :1G. Further built childrens)ear Building childrens ear remains a "ey focus for the +rou%. )hildrens ear as formally integrated into the global business in .212B11, ith the di'ision no located in the +rou%-s 9ondon head0uarters and its %roduct aligned ith core design and merchandising strategies. .212B11 also sa the intensification of ongoing efforts to correct those legacy issues that are inconsistent ith the global luxury %ositioning of the Burberry brand. A "ey focus of this effort has been to u%grade the brand %ositioning ith holesale %artners. A number of Fa%anese non(a%%arel licences ere also terminated during the year and the restructuring and transformation of the 7%anish business ere succesfully com%leted, ith the global collection rolled out across all channels for the first time from 7711. (EAS-RING .-R +R.GRESS Total re$enue gro)th HEear to *archI 4 measures the a%%eal of the brand to consumers, be it through Burberry stores or those of its de%artment store or s%ecialty retail customers.

+ro th rate is year(on(year underlying change i.e. at constant exchange rates. .221(.22> and .212J include the result of the discontinued 7%anish o%erations. .212 has been re%resented to exclude the discontinued 7%anish o%erations.

&n .212B11, Burberry-s re'enue as K1,521m 4 a .DG underlying increase on the %re'ious year. )hina, hich transferred from holesale to retail on 1 7e%tember .212 follo ing the ac0uisition of the former franchisees- o%erations, contributed 5G to this underlying gro th.

INTENSIF/ING N.N'A++AREL 0EVEL.+(ENT Intensif" and focus on under'#enetrated non'a##arel categories to le$erage further !urberr" design and merchandising e*#ertise and iconic branding through in$estment in #roduct de$elo#ment mar&eting and su##l" chain% 5on(a%%arel remains a "ey dri'er of gro th, contributing D2G of retailB holesale sales during the year. &n .212B11 it as again the +rou%-s fastest gro ing %roduct category.

Large leather goods 9arge leather goods remain the bac"bone of the Burberry non(a%%arel business, re%resenting about 52G of re'enues in this category. (en1s accessories *en-s accessories as amongst the strongest %erforming categories ithin non(a%%arel, albeit from a small base. 7trong gro th across holesale and retail channels as dri'en by a significantly ex%anded assortment ser'icing increased demand. )onsistent global gro th in this category as com%lemented by a %articularly strong %erformance in certain mar"ets such as )hina, here the %redominantly male luxury consumer res%onded 'ery %ositi'ely to the accessories offer. Shoes 8omen-s shoes re%resent an im%ortant gro th o%%ortunity for Burberry, reaching 1G of mainline sales in .212B11. Boots, a natural com%lement to the Burberry outer ear offer, %erformed %articularly strongly.

Licensing !eaut" &n Fune .212, the +rou% launched its first cosmetics line, Burberry Beauty, ith its fragrance licensee &nter%arfums. <einforcing the brand-s core trench and outer ear heritage through its focus on natural, effortless beauty, Burberry Beauty as first introduced as a test format through a limited number of holesale %artners globally and later directly to customers on burberry.com. 7u%%orted by digital assets and used in all Burberry ad'ertising cam%aigns and run ay sho s, Burberry Beauty is en?oying a strong early res%onse from consumers and %ress as it a%%roaches its first anni'ersary. Global licences Burberry has three global licensing agreements: fragrance H&nter%arfumsI, time%ieces HFossilI and eye ear H9uxotticaI. $uring the year, Burberry strengthened its organisation to manage these relationshi%s more intensi'ely, more closely aligning strategies to unloc" the %otential of licensed %roducts in line ith o ned categories. (EAS-RING .-R +R.GRESS Gro)th in non'a##arel re$enue HEear to *archI 4 measures the success of Burberry-s initiati'es to ex%and in this category, hich includes handbags, small leather goods, scar'es, shoes, belts and ?e ellery.

<e'enue is retailB holesale only. +ro th rate is year(on(year underlying change i.e. at constant exchange rates. .221(.22> and .212J include the result of the discontinued 7%anish o%erations. .212 has been re%resented to exclude the discontinued 7%anish o%erations.

&n .212B11, non(a%%arel re'enue increased by :.G underlying com%ared to .DG for Burberry as a hole. 5on(a%%arel accounted for D2G of retailB holesale re'enue, com%ared to :8G last year. !andbags are core to non(a%%arel, re%resenting about half of re'enue.

ACCELERATING RETAIL'LE0 GR.2TH Shift com#an" culture and #rocesses from a static )holesale model to a d"namic retail model% Retail'led gro)th refers not onl" to the o#eration of !urberr"1s o)n stores but also to a fundamental shift in the Grou#1s o#erating structure% .212B11 sa strong %rogress in building the brand-s retail %resence globally.

Retail e*#ansion and o#timisation A record number of ne Burberry stores o%ened around the orld in .212B11. A net .6 mainline stores ere o%ened during the year, including a ne flagshi% in Bei?ing, hile a net :D concessions ere added. &n line ith the +rou%-s flagshi% cluster strategy, half of the ne stores ere o%ened in existing high %rofile mar"ets, hile store reno'ations included ma?or u%grades in Boston and 9as Legas. 0igital integration .212B11 sa in'estment in in(store <etail Theatre technology to connect and le'erage inno'ati'e content across all %latforms. This technology enabled Burberry to synchronise com%letely consistent messages to customers across all mediums for the first time, and offered an unri'alled audio'isual ex%erience for customers in stores. i#ads ere also introduced to selected stores globally, allo ing access to increased in'entory through Burberry 8orld. +roducti$it" gains A continued focus on dri'ing store %roducti'ity led to the achie'ement of 11G com%arable store sales gro th in the year. A'erage unit retail %rices rose in the %eriod, hile %roduct flo and re%lenishment ca%ability im%ro'ed. The +rou%-s ongoing in'estment in customer ser'ice standards as a "ey dri'er in im%ro'ing %roducti'ity, e'ol'ing to co'er customer interactions

across all channels to deli'er a consistently high 0uality ex%erience. A global )ustomer 7er'ice team as established during the year to offer .DB1 tailored su%%ort to customers in 1D languages, by tele%hone, email and through the ne )lic" to )all and )lic" to )hat functions on Burberry 8orld. )lient 7er'ices, hich %ro'ides a %ersonalised luxury ser'ice to the +rou%-s most im%ortant clients, ex%anded to :2 locations across the orld, and the Burberry /x%erience sales and ser'ice %rogramme as successfully extended from the Americas, Asia and /uro%e to /merging *ar"ets including )hina. Ne) conce#t tests The Brit store conce%t as rolled out further in .212B11, follo ing the o%ening of the first test store in 5e Eor" in late .22>. Fi'e ne stores sho casing this casual, contem%orary ex%ression of the Burberry brand ere o%ened o'er the course of the year, including the first outside the ,7 in *ilan. (EAS-RING .-R +R.GRESS Gro)th in retail re$enue HEear to *archI 4 includes com%arable store sales gro th Hmeasuring gro th in %roducti'ity of existing storesI, %lus re'enue from ne s%ace.

+ro th rate is year(on(year underlying change i.e. at constant exchange rates. )om%arable store sales gro th is defined as the annual %ercentage increase in sales from stores that ha'e been o%ened for more than 1. months, ad?usted for closures and refurbishments.

Total retail sales increased by :.G underlying in the year. )om%arable store re'enue gro th increased by 11G H!1: >GC !.: 1:GI, a'erage selling %rices increased again in mainline stores and traffic benefited from digital mar"eting initiati'es. The transfer of )hina re'enue from holesale to retail from 1 7e%tember .212 follo ing the ac0uisition of the franchisees- o%erations contributed 1.G, ith the balance from ne s%ace.

Number of stores HAs at *archI 4 measures the reach of Burberry directly(o%erated stores around the orld.

.221(.22> and .212J include the stores of the discontinued 7%anish o%erations. .212 has been re%resented to exclude the discontinued 7%anish o%erations.

/xcluding the discontinued business in 7%ain, the number of stores directly o%erated by Burberry increased by 125 in .212B11. These included a net .6 ne mainline stores, a net :D ne concessions around the orld Hincluding .2 concessions in 7%ain o%ened in @D to sell the global collectionI as ell as the ac0uisition of 52 stores in )hina.

INVESTING IN -N0ER'+ENETRATE0 (AR,ETS Focus on and in$est in under'#enetrated mar&ets% For !urberr" these consist of both de$elo#ed mar&ets li&e the -nited States and emerging mar&ets including China India and the (iddle East% All distribution channels and a $ariet" of business models are used to o#timise these o##ortunities% ;ey highlights in .212B11 include:

China ac3uisition The ac0uisition of the Burberry business in )hina as a clear highlight of the year. &n 7e%tember .212, for about K65m, the +rou% ac0uired 52 stores across :2 cities, hich had %re'iously been o%erated by its !ong ;ong based franchisee. This ac0uisition gi'es the +rou% control of the Burberry brand in the fastest(gro ing luxury mar"et in the orld. Ten ne stores ha'e already been o%ened since the ac0uisition, including the brand-s most digitally(ad'anced flagshi% in the orld in Bei?ing.

*erchandising and in'entory initiati'es ha'e successfully dri'en %roducti'ity in existing stores, ith com%arati'e store sales u% about :2G in the second half of the year. E*tended #resence in Latin America India and ne) mar&ets Follo ing the establishment of a ?oint o%eration in &ndia and the establishment of regional offices in 7Mo #aulo and $ubai in .22>B12, the +rou% continued to extend the Burberry %resence in these high gro th mar"ets. A ma?or brand e'ent in *umbai in $ecember .212 mar"ed the o%ening of the brand-s fifth store in &ndia, ith related #< and mar"eting acti'ity introducing the brand to this young, digitally(a are customer base. &n 9atin America, the +rou% o%ened its first store in the "ey city of 7Mo #aulo, and no has three stores o%erating in 9atin America. A total of .5 stores ere o%ened in /merging *ar"ets o'er the course of .212B11. Through franchise %artners, the first Burberry stores ere o%ened in Armenia, /gy%t, &srael and *ongolia during the year. !uilding )holesale The +rou% continued to in'est in its holesale %resence globally, building se%arate 9ondon, Brit and childrens ear corners in de%artment stores, exiting generic outer ear de%artments and adding real estate for mens ear. A focus on building in(season re%lenishment ca%ability su%%orted gro th. .212B11 also sa a continued focus on building the Burberry Tra'el <etail business. (EAS-RING .-R +R.GRESS Number of stores in Emerging (ar&ets HAs at *archI 4 measures the reach of the Burberry brand in these high %otential countries.

/merging *ar"ets include: )hina, the *iddle /ast, /astern /uro%e, <ussia, BraAil, &ndia and other %arts of 7outh /ast Asia, 7outh Africa and 9atin America.

Burberry added a net .5 stores in /merging *ar"ets, of hich a net se'en stores ere in )hina, fi'e in the *iddle /ast and three each in &ndia and 9atin America. =f the 1:6 stores, 82 are directly o%erated, of hich 51 are in )hina, three in 9atin America, 15 in the Burberry *iddle /ast ?oint o%eration and fi'e in the Burberry &ndia ?oint o%eration.

+-RS-ING .+ERATI.NAL E4CELLENCE !urberr" continues to #ursue its goal to be recognised as much for o#erational e*#ertise as for #roduct and mar&eting e*cellence% A continued focus on, and in'estment in, o%erational excellence has dri'en im%ro'ements across all business functions, and has been a "ey enabler for front(end inno'ation.

Enhanced ca#abilities <einforcing and refining core bac"(end disci%lines as a central focus again in .212B11, s%ecifically in re%lenishment, %lanning, logistics and sourcing. <e%lenishment %ractices ere enhanced across all %roduct categories, resulting in a nearly 52G contribution of re%lenishment styles to mainline sales o'er the year. /nhancing %lanning ca%abilities enabled better execution and in'entory management and .212B11 also sa the de'elo%ment of a global %ricing architecture. &m%ro'ements in sourcing dro'e sa'ings during the year and 0uality %rogrammes ere introduced to factories and distribution centres globally. 9ogistics enhancements enabled the execution of monthly deli'eries and fulfilment of in(season reorders. Introduced monthl" flo) &n .212B11 the +rou% began to execute a synchronised monthly flo of ne %roduct and floorsets across its %hysical and 'irtual real estate, featured in tailored digital assets. <e0uiring a co(ordinated and integrated a%%roach across the business, from $esign, to *erchandising, to Buying and <etail, this ne a%%roach introduces a refreshed offer each month, hile %ro'iding a strong %latform from hich to connect customers more regularly ith the Burberry brand. Continued SA+ im#lementation The +rou% too" further ste%s to ards the com%letion of its im%lementation of 7A#, ith 82G of stores co'ered by the end of the year and the incor%oration of )hina and Burberry *iddle /ast scheduled for .211B1.. &n addition, bet een A%ril and 5o'ember .212, Burberry successfully im%lemented a ne , single 7A# !< database for the em%loyee records of 6,522 em%loyees in .5 countries across /uro%e, the Americas and Asia. This is allo ing the +rou% to align its global !< %rocesses and structures, and is %ro'iding global 'isibility for the first time. +rioritised organisational effecti$eness )loser collaborati'e relationshi%s ithin the business ha'e been critical to the successful de'elo%ment and im%lementation of +rou% initiati'es. Further senior le'el go'ernance structures ha'e been established during the year to le'erage o%erating best %ractice globally and to co ordinate all ca%ital in'estments. For exam%le, &T has become an integral %artner to "ey mar"eting and retail initiati'es including Burberry 8orld and <etail Theatre, hile su%%ly chain inno'ation has been a "ey enabler in

allo ing customers to %urchase directly from the run ay. The foundation as also set during the year for the establishment of a global shared ser'ices team to dri'e efficiencies and enhance financial control across the business, hile global strategy teams ha'e been established to build detailed medium to long(term 'ie s for all regions. /xternally, %artnershi% or"ing continues to bring benefits in "ey areas such as cor%orate res%onsibility. Burberry ?oined the /thical Trading &nitiati'e during the year, ma"ing it the first luxury brand to do so. (EAS-RING .-R +R.GRESS Retail5)holesale gross margin HEear to *archI 4 measures, among other things, ho

efficiently Burberry sources its %roducts.

.221(.22> and .212J include the result of the discontinued 7%anish o%erations. .212 has been re%resented to exclude the discontinued 7%anish o%erations.

+ross margin in retailB holesale increased by :>2 basis %oints to 6D.>G in .212B11 com%ared to the 61.2G margin the %rior year Hexcluding the discontinued 7%anish o%erationsI due to the shift from holesale to retail and increased re%lenishment.

Ad6usted retail5)holesale o#erating #rofit margin HEear to *archI 4 measures ho Burberry-s initiati'es and its in'estment to im%ro'e its business %rocesses, including sourcing, &T and logistics are im%acting its %rofit margin.

Ad?usted o%erating %rofit margin is stated before exce%tional items. .221(.22> and .212J include the result of the discontinued 7%anish o%erations. .212 has been re%resented to exclude the discontinued 7%anish o%erations.

Burberry-s ad?usted retailB holesale o%erating %rofit margin increased from 1..1G in .22>B12 Hexcluding the discontinued 7%anish o%erationsI to 15.6G. <egional cost le'erage as achie'ed des%ite the shift from holesale to retail and in'estment in ne 'entures.

MARKETS AND RISKS

/'ol'ing channel mix #rinci%al ris"s EV.LVING CHANNEL (I4 Burberry sells its %roducts to the end consumer through both retail Hincluding digital commerceI and holesale channels. For .212B11, retail accounted for 6DG of re'enue and holesale .>G. Burberry also has licensing agreements in Fa%an and globally, le'eraging the local and technical ex%ertise of its licence %artners. Re$enue b" channel /xcluding the results of the discontinued 7%anish o%erations. ,nderlying is calculated at constant exchange rates.

Retail

&ncludes 11D mainline stores, 1>> concessions orld

ithin de%artment stores and DD outlets, as

ell as digital commerce around the

:.G underlying gro th H.2G excluding im%act of )hina ac0uisitionI 11G com%arable store gro th 5et .6 mainline store o%enings in the year, including Bei?ing, 7Mo #aulo and *umbai 2holesale

&ncludes sales to de%artment stores, multi(brand s%ecialty accounts and Tra'el <etail, as ell as sales to its franchisees o%erate 56 Burberry stores, mainly in /merging *ar"ets

ho

16G underlying gro th H.5G excluding im%act of )hina ac0uisitionI 7trength from Asia #acific and the Americas, %articularly Asia Tra'el <etail and ,7 de%artment stores /ntered four ne mar"ets ith franchise %artners HArmenia, /gy%t, &srael and *ongoliaI

Licensing

&ncludes royalty income recei'ed from Burberry-s licensees in Fa%an, its global licensees for fragrance, eye ear and time%ieces, and a small /uro%ean childrens ear licensee

DG underlying decline +ro th in global %roduct licences offset by termination of Fa%anese leather goods licence in .212 and the final regional mens ear licences +reater integration bet een strategy, %roduct de'elo%ment and digital mar"eting +RINCI+AL RIS,S Effecti$e management of ris&s is essential to the deli$er" of the Grou#1s ob6ecti$es the achie$ement of sustainable shareholder $alue the #rotection of its re#utation and meeting cor#orate go$ernance re3uirements% The ris"s set out belo re%resent the %rinci%al ris"s and uncertainties hich may ad'ersely im%act the management of the +rou% and the execution of its gro th strategies. The ste%s the +rou% ta"es to address these ris"s, here they are matters ithin its control, are also described. 7uch ste%s ill mitigate but not eliminate ris"s. 7ome of the ris"s relate to external factors hich are

beyond the +rou%-s control. The order of the ris"s is in no ay an indication of their relati'e im%ortance, and each of the ris"s should be considered inde%endently. &f more than one of the e'ents contem%lated by the ris"s set out belo occur, it is %ossible that the combined o'erall effect of such e'ents may be com%ounded. The Board has o'erall res%onsibility for ensuring that ris"s are effecti'ely managed by the +rou%. The Board has delegated to the Audit )ommittee res%onsibility for re'ie ing the effecti'eness of the +rou%-s system of internal control and ris" management methodology. <is"s are formally re'ie ed by the +rou% <is" )ommittee hich meets at least three times a year. ;ey business ris"s are also considered as %art of the +rou%-s strategy de'elo%ment and ongoing business re'ie %rocesses. The ris" assessment %rocess has been enhanced during the financial year incor%orating best %ractice identified during a benchmar"ing re'ie . #lease refer to the )or%orate +o'ernance section for further details of the +rou%-s ris" management %rocesses and internal controls.

CORPORATE RESPONSIBILITY
/xcellence in %eo%le =%erating res%onsibly E4CELLENCE IN +E.+LE Sei7ing the energ" of our brand and the #assion of our #eo#le )e lead the e$olution of an agile connected !urberr" creating the talent of toda" and tomorro)% Burberry is %art of an extended community made u% of both em%loyees and external %artners, ith the t in aims of being a great brand, as ell as a great com%any to or" for and do business ith. /'ol'ing the organisation, across regions and functions, is a natural %art of the business and has become second nature. This year e ha'e established a number of cross(functional strategic decision councils that enable us to stay closely connected and ma"e timely decisions about business %riorities that su%%ort our fi'e "ey business strategies. /ach strategic council is chaired and co( chaired by a member of the /xecuti'e 7trategic )ouncil and indi'iduals from cross(sections of the business are in'ited to connect and collaborate based on their ex%ertise. /xam%les of these councils include a 7trategic )ustomer )ouncil, 7trategic &nno'ation )ouncil and 7trategic <es%onsibility )ouncil. A more robust %rocess to identify talent and %otential as also im%lemented during the year, to feed effecti'e succession and or"force %lanning, and ele'ate our existing 9eadershi% $e'elo%ment %rogramme and bi(annual Talent <e'ie s. /'ery em%loyee in the com%any is no eligible to %artici%ate in the +rou%-s freeshare %lans and is in a %erformance based incenti'e scheme. 0i$ersit" A commitment to di'ersity remains one of our %rinci%al 'alues. =ur di'erse em%loyee %o%ulation continues to enrich and strengthen our com%any culture, dri'ing our success as a luxury brand. After continued ex%ansion into emerging mar"ets and the o%ening of ne regional head office locations in Asia and the *iddle /ast, our global or"force continues to di'ersify and gro . Burberry no em%loys nationals of >5 countries across all continents. 8e continuously o%en our doors to ne and de'elo%ing talent and e are focused in %ro'iding o%%ortunities for em%loyees across the organisation to realise their full %otential. 8e are committed to %romoting gender e0uality and e0ual o%%ortunities at e'ery le'el of the organisation. =ur global management team is e'enly s%lit by gender. &n the .212 =%%ortunity 5o A ards, Burberry as a arded the 3Female FT7/ 122 A ard- hich is %resented to the ,; business ith the most omen on its board. This as in addition to recei'ing the 3FT7/ /xecuti'e 8omen A ard- hich is gi'en to the ,; business that em%loys the most female executi'es as listed in the FT7/ 122 index. Health safet" and )ellbeing Burberry is committed to %ro'iding a safe and healthy or"ing en'ironment for its em%loyees, customers and third %arty contractors. Burberry uses a third %arty to underta"e audits at its locations throughout the orld. The audit frame or" re0uires stores and offices to be audited at least once e'ery three years, and distribution centres or manufacturing sites annually. A go'ernance frame or" is in %lace to ensure audit recommendations are addressed in a%%ro%riate timeframes, and ultimate o nershi% sits ith the +lobal !ealth 6 7afety )ommittee, hich is chaired by a Board member. Burberry launched a ellbeing %rogramme in .212B.211, hich as designed to encourage staff to lead healthier lifestyles. <esearch identified that staff had found that the %rogramme had increased their a areness of ho to li'e a healthier lifestyle, and reduced the amount of sic" lea'e. &n the ,; this reduced dramatically to 2.8G days %er em%loyee com%ared to the .212 )hartered &nstitute of #ersonnel and $e'elo%ment retail and holesale rate of ..6G. The multi'channel customer e*#erience &n res%onse to an increasingly multi(channel customer, the Burberry /x%erience sales and ser'ice %rogramme has e'ol'ed to co'er all customer interactions across all channels 4 in(store, online, and by %hone(to(deli'er an exce%tional, consistent and differentiated ser'ice.

&n store, the roll out of the Burberry /x%erience began in /merging *ar"ets and )hina, after %re'ious successful im%lementation in the Americas, Asia and /uro%e. )onsistent sales and ser'ice training is no %ro'ided across all stores globally. The %rogramme continues to e'ol'e in order to enhance further the customer ex%erience, and the first in(store %ilots of multi(channel digital initiati'es ha'e been com%leted. 7er'ice standards ha'e been de'elo%ed and e'ol'ed through guidelines and %olicies that ensure all customer(facing channels offer an ele'ated and globally consistent ser'ice. The im%lementation of global re%air centres and an &nternational <eturn #olicy ha'e enhanced the after sale ser'ice, ensuring a %ersonalised ex%erience at e'ery interaction ith the brand. There has been in'estment in im%ro'ing customer ser'ice contact and this year a global in(house )ustomer 7er'ice team has been established. This team %ro'ides .DB1 su%%ort to customers in 1D languages. They engage ith customers by %hone, email and through 3)lic" to )hat- and 3)lic" to )all- on burberry.com. )lient 7er'ices, hich %ro'ides a %ersonalised luxury ser'ice to Burberry L&)s HLery &m%ortant )lientsI orld ide, continues to ex%and across all regions and to reinforce customer loyalty globally. 7%ecialist )lient 7er'ices )onsultants are no a'ailable in :2 flagshi% locations across the orld, s%ea"ing .2 languages. L&)s also ha'e access to )lient 7er'ice )onsultants online and by %hone to enhance the luxury ex%erience. ,nder%inning these acti'ities has been an initial focus on the analysis of cross(channel business acti'ity, generating customer insight to increase retail %roducti'ity.

C.+ERATING RES+.NSI!L/ Since its foundation in 89:; !urberr" has sought to achie$e the $er" highest 3ualit" standards% Cor#orate Res#onsibilit" is at the heart of !urberr" business #ractices reinforcing the heritage and authenticit" of the brand% Burberry belie'es that to be a great brand you also need to be a great com%any. This belief is reflected in its continued %ursuit of im%ro'ed )or%orate <es%onsibility H)<I %erformanceC its tac"ling of issues related to climate changeC and efforts to ins%ire em%loyees on issues of ethical trade, en'ironmental sustainability and community in'estment. Burberry is a member of the ,5 +lobal )om%act and uses the )om%act-s Ten #rinci%les to guide its )< acti'ities. The com%any is also listed on the FT7/D+ood &ndex, achie'ed the )arbon Trust 7tandard and is an acti'e member of both the /thical Trading &nitiati'e and Business for 7ocial <es%onsibility. The follo ing sections outline Burberry-s a%%roach to tac"ling im%ortant social and en'ironmental challenges, including some "ey achie'ements in .212B11.

.$erall highlights of the "ear &ncreased the number of factories

ith or"er hotlines by 5DG to a total of ::

Foined the /thical Trading &nitiati'e 4 the first luxury brand to do so 9aunched a 7ustainability $igital Film to em%loyees globally to raise a areness of cor%orate sustainability initiati'es )ommitted to increase the %ro%ortion of the +rou%-s ,; electricity %urchased from combined heat and %o er sources from .>G to 122G to dri'e demand for rene ables in the ,; The Burberry Foundation distributed o'er .,522 iconic trench coats to %artner charities in 9ondon, 5e Eor" )ity, !ong ;ong and 7eoul, all or"ing ith disad'antaged youth CR go$ernance *ichael *ahony, 7enior Lice #resident )ommercial Affairs 6 +eneral )ounsel, is accountable for )< matters on behalf of Burberry and the Board. !e chairs the )< )ommittee, hich formally re%orts to the +rou% <is" )ommittee. The )< )ommittee held three meetings during the year. T o su%%lementary committees, the +lobal 7ustainability )ommittee and 7u%%ly )hain <is" )ommittee met three times res%ecti'ely. &n .212B11 the +rou% strengthened its )< team to a total of 16 members globally. Ethical su##l" chain Burberry belie'es that its %roducts should be made only in factories that com%ly ith local labour and en'ironmental la s and by or"ers ho or" fair but not excessi'e hours, are %ro'ided ith a safe, hygienic or" en'ironment, and ho can exercise their right to freedom of association as ell as collecti'e bargaining. The ma?ority of Burberry %roducts are manufactured in /uro%e through third %arty su%%liers. All Burberry su%%liers are go'erned by the +rou%-s /thical Trading #olicy, hich sets clear ex%ectations regarding the management of labour standards. Four ne %olicies ere added to this during the year, co'ering Bribery and )orru%tion, Foreign )ontract 9abour, ,nauthorised 7ub()ontracting and Animal 8elfare. Ten Burberry team members are charged ith ensuring the im%lementation of the %olicy throughout the su%%ly chain as their sole res%onsibility, or"ing in %artnershi% ith third(%arty auditors and 5+=s as a%%ro%riate to a%%ro'e and assess the acti'ities of su%%liers. The team conducted o'er 122 audits, ca%acity building and hotline inter'entions in .212B11. To com%lement its auditing %rogramme, Burberry has trained or"ers in confidential or"er hotline ser'ices in select factories to %ro'ide an effecti'e histle( blo ing mechanism and counselling ser'ice.

To achie'e long(term im%ro'ements in labour conditions, Burberry %ro'ides su%%ort and resources to su%%liers to em%o er them to ta"e res%onsibility for their factory and subcontractor conditions. The )< team deli'ers su%%lier training co'ering the +rou%-s ethical trading ex%ectations, management systems and counsel on trans%arency and standards for subcontractors. The full Burberry /thical Trading )ode of )onduct is a$ailable here. Sta&eholder engagement Burberry understands that it cannot sol'e su%%ly chain labour issues alone and maintains an o%en dialogue brands, 5+=s and trade unions to bring collecti'e action to bear across the su%%ly chain.

ith su%%liers, other

To increase engagement ith ethical trade sta"eholders, Burberry ?oined the /thical Trading &nitiati'e H/T&I in Fune .212. The /T& is a tri%artite alliance of com%anies, trade unions and 'oluntary organisations that or" collaborati'ely to im%ro'e the li'es of or"ers orld ide. The or" of the Business for 7ocial <es%onsibility 7ustainable 9uxury 8or"ing +rou%, of hich Burberry as a founding member, also continued this year, focusing on animal elfare guidelines and the exotic s"ins su%%ly chain. As a result, the release of a common Animal 8elfare #olicy by the +rou% as communicated to Burberry su%%liers, detailing its high ex%ectations in res%ect of elfare standards. Burberry is also a member of the 9eather 8or"ing +rou%, su%%orting its efforts to im%ro'e trans%arency in the leather industry. Fur As a luxury brand ith a strong outer ear heritage, there ill be occasions ex%ect the use of natural hides in Burberry collections. here Burberry design teams or consumer tastes

Burberry ill not use fur if there is any concern that it has been %roduced using the unacce%table treatment of animals. Burberry safeguards the correct ethical standards and traceability in all fur sourcing. 7%ecifically, it sources fur from furriers ho ant to u%hold high standards of ethical treatment of animals and ho share its concerns about animal elfare. Burberry %ublicly su%%orted the Truth &n Fur 9abelling Act in the ,7 in .212. Sandblasting Burberry does not utilise sandblasting on any of its %roducts manufactured by or on behalf of the +rou%. Burberry re0uires its su%%liers to use hand brushing to distress denim %roducts, and use all a%%ro%riate #ersonal #rotecti'e /0ui%ment to ensure that or"ers- health is %rotected during the %rocess.

Audits training #rogrammes factor" management follo)'u# $isits and hotline #rogrammes HEear to *archI

En$ironmental sustainabilit" Burberry is committed to finding inno'ati'e ays to minimise en'ironmental im%acts from the %roduction, distribution and sales of its %roducts, and to reducing its en'ironmental foot%rint throughout its global o%erations. &n order to embed sustainability further this year Burberry strengthened its +lobal 7ustainability )ommittee to include re%resentati'es from a ider 'ariety of functions ithin the business. The members are designated 7ustainability 9eaders, res%onsible for embedding sustainable business %ractices throughout the +rou%-s o%erations. &n su%%ort of the 7ustainability 9eaders- or", Burberry engaged all em%loyees globally 'ia targeted digital communications encouraging them to continue to ins%ire and challenge each other to ards ne ays of o%erating. The full Burberry +lobal /n'ironmental #olicy is a$ailable here. <=8=588 en$ironmental #erformance results Carbon Trust> &n A%ril .212, Burberry as a arded the )arbon Trust 7tandard for its ,; o%erations Energ">

)ommitted to %urchasing solar energy to %o er our distribution centre in Lineland, ,7A &nducti'e motor o%timisation %anels ere trialled in all ,; manufacturing sites to reduce energy consum%tion

!usiness tra$el> $ue in %art to executing the +rou%-s under(%enetrated mar"ets strategy, air tra'el for ,; em%loyees increased by 5.G %er K1,222 of turno'er

2aste>

There as a rene ed focus on di'erting aste from landfill. &n !orseferry !ouse there as a 5DG increase in aste recycled during the year The closed loo% textile recycling system launched in the ,; last year has been ex%anded to /uro%e. 7ince A%ril .212, Burberry-s recycling %artner has con'erted o'er 1:2 tonnes of sam%le and ra material aste into car door insulation Logistics trans#ort emissions> An un%recedented rise in sales cou%led ith the shift from seasonal to monthly deli'eries im%acted the +rou%-s ability to shi% goods by sea. To address this, a number of "ey initiati'es ha'e been introduced, including centralised logistics decision ma"ing, shortening of critical %ath and increasing strategic ra materials %re(buys in order to accommodate sea trans%ortation lead times. +erformance disclosure Burberry ma"es annual disclosures to the )arbon $isclosure #ro?ect and Forest Foot%rint $isclosure.

Global building energ" C.< HEear to *archI H)=. "g %er K1,222 of turno'erI H$ata excludes discontinued 7%anish o%erationsI

Burberry ac0uired its )hinese o%erations ith effect from 1 7e%tember .212. H=n a li"e(for(li"e basis, excluding both the discontinued o%erations in 7%ain and ac0uired business in )hina in .212B11, our )= . emissions %er K1,222 turno'er ere .2.5 )= .I. <estatement of .228 and .22> data to include sites in Asia and /merging *ar"ets.

+rimar" trans#ort shi##ed b" sea HGI HEear to *archI HBased on a sea 's. air freight com%arisonC road data has been excludedI

Air tra$el C.< HEear to *archI H)=. "g %er K1,222 of turno'er, based on ,; /m%loyeesI

The data in these graphs comes from a combination of automated and manual internal processes. The ma ority is based on actual data! supplemented! "hen necessary! by appro#imations. $efra 2010 con%ersion factors ha%e been used throughout. Communit" in$estment &n'esting and engaging in the communities here Burberry o%erates remains a "ey element of the Burberry )< strategy. &n .212B11, Burberry dedicated a total of K:m, or 1G of %rofits before tax, to charitable causes around the globe, a t ofold increase on .22>B12. The ma?ority of this gi'ing as a donation to the Burberry Foundation. !urberr" Foundation The establishment of the Burberry Foundation in .228 H,; registered charity number 11.:12.I mar"ed the creation of a strategic %hilanthro%ic %latform, hich enabled the )om%any to refine, focus and accelerate its community engagement efforts. The Foundation-s mission is an embodiment of com%any founder Thomas Burberry-s core 'alues: to %rotect, ex%lore and ins%ire. 7%ecifically, it is dedicated to hel%ing disad'antaged young %eo%le to realise their dreams and %otential through the %o er of their creati'ity. The Burberry Foundation su%%orts inno'ati'e organisations and %rogrammes that le'erage Burberry assets, combining financial su%%ort ith the "no ledge, creati'ity and dedication of Burberry em%loyees.

The Foundation recei'es donations from Burberry and other benefactors, hich enable it to a ard strategic grants and ma"e targeted donations of in("ind gifts. &n .212B11, the Foundation recei'ed K..:m in cash and more than K.62,222 in("ind donations from Burberry. This enabled the Foundation to su%%ort thousands of young %eo%le in Boston, )hicago, !ong ;ong, 9ondon, 9os Angeles, 5e Eor", 7an Francisco and 7eoul, 'ia "ey %artnershi%s ith 11 charity organisations. Em#lo"ee engagement As %art of the )om%any-s em%loyee engagement %rogramme, Burberry em%loyees are encouraged to dedicate u% to four hours of %aid lea'e %er month in su%%ort of the Foundation-s charity %artners. /m%loyees %ro'ide critical one(off assistance to hundreds of young %eo%le, as ell as long(term su%%ort 'ia one(on(one mentoring and ee"ly hel% ith school home or". &n .212B11 o'er .5G of em%loyees located in cities here the Foundation is acti'e offered their %ersonal talents and business s"ills to hel% disad'antaged young %eo%le or" to ards realising their full %otential. &n total, o'er :,122 hours or D>2 or"ing days ere dedicated to 'olunteering. A significant %ro%ortion of em%loyee engagement efforts are dedicated to increasing the em%loyability of disad'antaged young %eo%le in 9ondon, 5e Eor" )ity and !ong ;ong. ='er the %ast three years, 1.6 young %eo%le ere brought into cor%orate offices and retail stores for ?ob training and hands on or" ex%erience, ranging from t o to ten ee"s. Beginning ith a ee" of intensi'e training designed and deli'ered by Burberry 'olunteers, the entire ex%erience %ro'ides %artici%ants ith the o%%ortunity to ex%lore their o n creati'ity and talents hilst de'elo%ing the s"ills and confidence needed to succeed in today-s com%lex business orld. 7uccessful %rogramme graduates recei'e an iconic Burberry coat to further boost their confidence as they loo" to enter the ?ob mar"et armed ith ne s"ills and ex%eriences. This year alone, more than .22 em%loyees dedicated o'er 1,522 hours to hel% change the li'es of 65 young %eo%le through the ?ob training %rogramme. In'&ind donations Burberry regularly donates %roducts to the Burberry Foundation for strategic distribution through %artner charities. $onations range from one(off gifts of non(trademar" fabric and materials for art and design courses, to a large scale annual )hristmas )oat $onation %rogramme. &n .212B11, a record number of coats ere distributed in 9ondon, 5e Eor" )ity, !ong ;ong, and 7eoul, to charities or"ing ith disad'antaged young %eo%le to hel% them access em%loyment or re(enter education. :1 organisations matched the coats ith reci%ients for siAe and need, ith testimonials from reci%ients confirming that, far from being ?ust a gift of armth, a Burberry coat is a gift of confidence and ins%iration that ill last for years to come. Cor#orate donations An ongoing %art of doing business is to selecti'ely su%%ort customer and su%%lier related e'ents and charitable causes. /ach regional office has a discretionary charity budget hich is managed and a%%ro'ed locally. 0isaster relief Burberry su%%orted relief efforts follo ing t o catastro%hic e'ents this %ast year. &n su%%ort of relief efforts after de'astating flooding in #a"istan, Burberry contributed to the $isasters /mergency )ommittee, an umbrella organisation for 1: humanitarian aid agencies. &n res%onse to the earth0ua"e and tsunami in Fa%an in *arch, Burberry and its em%loyees contributed to 7a'e the )hildren and British <ed )ross to assist ith relief and reconstruction efforts.

Communit" donations ?@mA HEear to *archI $irect donations are contributions made by the )om%any. &ndirect donations are donations from third %arties that ha'e been facilitated by Burberry.

Established in 2008, the Burberry Foundation (registered charity in England and Wales, registered no. 1123102) is a philanthropic organisation dedicated to helping young people realise their dreams and potential through the power of their creativity. Through the generous donations of Burberry, its employees and customers, the Foundation works to help young people gain confidence, build connections in their communities, and grasp opportunities to succeed. We accomplish these goals by granting financial support and combining that with the knowledge, creativity and dedication of Burberry employees. A key extension of the tradition of philanthropy at the company, the Burberry Foundation provides a strategic platform for Burberrys engagement in community initiatives and builds charitable giving in key regions where the majority of Burberry employees live and work.

VISION The Burberry brand is anchored in the integrity of its outerwear, a tradition that began when Thomas Burberry invented gabardine and continued by Burberry making the coats that would keep Ernest Shackleton, among other adventurers, warm and dry regardless of the extremity of their conquests. Since the beginning of the !th century, aviators, cartographers, and mountain climbers alike have worn Burberry to expand the boundaries of human experience. The Burberry "oundation recognises that while the nature of exploration has changed, the hori#ons today$s young people seek to conquer are no less daunting than the South %ole was a century ago. The twenty&first century requires new skills among young people who are looking to become successful adults in today$s multicultural, diverse global community. They must be educated well beyond their primary school years' they must be skilled in language and relationships and be technologically and culturally fluent' and they must navigate difficult decisions and locate trustworthy mentors to open doors to professional careers and meaningful lives. (ust as Burberry has clothed and encouraged the adventurers of the past, the Burberry "oundation will support the creative spirit and the ambition of the young people of today by helping them to navigate the uncertain terrain of their age and of the complex world in which we live.
FUNDINGPRIORITIES The Burberry Foundations grant making is focussed on supporting innovative programmes and building sustainable partnerships with charitable organisations that work with young people, specifically helping them to: gain confidence in their daily lives and develop self-esteem; build connections to their families, friends, partners, and society at large; and develop the ability to reach for opportunities in school, work, and life.

Confidence, connection, and opportunity are critical components of a young persons life. Confidence supports an individual from the inside; connection to community provides nurturing and support from the outside; and opportunities make possible the way forward in work, love, and life. By supporting young people in these three critical components, the Burberry Foundation aims to kindle their creative spirit, which we believe is innate in everyone and which empowers young people to envision their futures and go after their dreams. In considering requests for support, in addition to meeting the funding priorities named above, we give preference to projects that: are located in a community where Burberry employees live and work; are managed competently through accountability, cost effectiveness, strong leadership and creativity; provide a significant and measurable impact; have factored in long-term sustainability; and have the potential to offer volunteering opportunities for Burberry employees.

HOWWEWORK

The Burberry "oundation invests in select charities focused on supporting young people in the key cities in the regions where the ma)ority of Burberry employees live and work. The "oundation facilitates and encourages Burberry employees to participate in volunteer roles with our charity partners, and also makes in&kind donations, often merchandise donated by Burberry, as and when appropriate. Because of our long&term commitments to charity partners, and the "oundation*s tendency to proactively seek pro)ects for funding, we do not accept unsolicited requests for support' however, we

are always interested in hearing about innovative programmes that fit within our funding priorities and empower the creative spirit in young people. +f you would like to send us information about your charity$s work, please contact the Burberry "oundation atenquiries,burberryfoundation.com orThe Burberry "oundation .orseferry .ouse .orseferry /oad 0ondon S12% 31

ELECTRONIC SHAREHOLDER COMMUNICATION

)om%any legislation allo s com%anies to communicate ith shareholders electronically, either 'ia a ebsite or by email. The benefits of communicating electronically are that %rinting, %ostage and %a%er costs are reduced, less im%act is made on the en'ironment and information is recei'ed more 0uic"ly and sim%ly. <egistering for electronic communication enables you to ha'e greater control of your shareholding. =nce registered, you ill recei'e an email alert each time a ne document is made a'ailable. Eour email address ill not be used for any %ur%ose other than communicating ith you as a shareholder. 8hen registered you ill be able to:

elect ho

e communicate ith youC

amend your detailsC change the ay you recei'e your di'idendsC and buy or sell shares online. To register to recei'e electronic communications you ill need your 7hareholder <eference 5umber certificates, di'idend 'ouchers and most other shareholder corres%ondence. hich can be found on share

htt%:BB .share'ie .co.u"B#agesBdefault.as%x Burberry +rou% %lc, the global luxury com%any, today announces its results for the year ended :1 *arch .211. B!urberr" deli$ered strong o#erational and financial #rogress during the "ear than&s to the consistent e*ecution of our core strategies b" our team and #artners more closel" connecting our brand $ision and $alues to consumers around the )orld% 8hile mindful of global macro challenges in the current year, e ill continue to in'est to dri'e gro th across our %ortfolio by channel, region and %roduct.N Angela Ahrendts Chief E*ecuti$e .fficer%

E*#and All C Close All

o o o o o o o o o o o

HIGHLIGHTS Strong financial #erformance <e'enue u% .1G to K1.5billion <etailB holesale re'enue u% .>GC ad?usted o%erating %rofit u% 5>G Ad?usted #BT u% :>G to K.>8mC re%orted #BT K.>6m Ad?usted diluted /#7 u% :>G to D8.>%C re%orted diluted /#7 D6.>% Full year di'idend u% D:G to .2.2% 5et cash of K.>8m after K5.m s%end to date on )hina ac0uisition ,e" strategies continued to under#in o#erational #rogress $ouble(digit re'enue gro th in retail and holesale, in all regions and all %roduct categories <etail re'enue u% :6G to 6DG of sales H.212: 62GI 5on(a%%arel re'enue u% :5G to D2G of sales H.212: :8GI #roduct strategies dro'e gro th es%ecially in core outer ear, relaunched mens ear and Burberry #rorsum and 9ondon Further de'elo%ment of digital initiati'es across all channels

o o o o o

+ood %rogress on integration of )hinese o%erations Continued focus in F/ <=8< on in$esting for gro)th )a%ital ex%enditure %lanned at K182(.22m H.211: K128mI /m%hasis on flagshi% o%enings and refurbishments in high %rofile locations including 9ondon, )hicago and !ong ;ong Accelerating ne s%ace gro th to 1.(1:G and 15(.2 ma?or reno'ations /nabled by brand momentum and im%ro'ed %roducti'ity All re'enue metrics and commentary in the +rou% Financial !ighlights and Business and Financial <e'ie exclude the results of the discontinued 7%anish o%erations. FE .212 has been re(%resented to sho these results se%arately in discontinued o%erations. $iscontinued o%erations in FE .211 include an o%erating loss of K..1m H.212: nilI, restructuring costs of KD.1m H.212: KD5.DmI and a nil tax charge H.212: K.5.2mI. OAd?ustedN excludes: 1. <estructuring credit of K1.2m in .211 H.212: K:.Dm chargeI relating to the +rou%-s cost efficiency %rogrammer announced in Fanuary .22>. .. #ut o%tion liability finance charge relating to the 15G economic interest in the )hinese business of K:..m H.212: nilI. ,nderlying change is calculated at constant exchange rates. )ertain financial data ithin this announcement ha'e been rounded.

Strategy in the world of high fashion

by Peter Small

Known as the 'Rag Trade', the industry involving high fashion and designer clothes is as tough and competitive as anything likely to be encountered in e-business and e-commerce. Like the world of digital communications, it is an environment of continuous and unpredictable change. ashions come and go. Trends develop and then !uickly disappear. "t is the perfect environment for the entrepreneur. The Rag Trade can be split into four separate sections# designers, manufacturers, wholesalers and retailers. To see how various entrepreneurial and corporate strategies coe$ist and compliment each other within these categories it is essential to reali%e the fashion industry isn't about clothes and designs at all# it is about information. "t is about people's need to establish themselves in a social pecking order and associate with a particular social group. ashionable clothes are communication devices, they make a statement about the wearer, identifying them with a group and their position within a group. &hanging fashions e$hibit all the characteristics of a comple$ dynamic system. &hange is erratic and unpredictable. 'table fashions or trends emerge( these will suddenly change and destabili%e. or a while there is a mi$ture of different fashions and then this suddenly settles down into a new emergent style. This has all the hallmarks of chaos. "t is unpredictable( it has erratic periods of stability and instability and the phenomenon of emergence. To understand the fundamental mechanism driving this chaotic environment we'll look at one of the dialogues from the &)-R*+ ,-ow .od +akes .od,# "t is a conversation between a man and a woman. "t is in the /012's and a man is trying to e$plain to the woman how he chooses the fashions to buy for his bouti!ue. "Do you remember a few years back there was a craze to wear a gold or silver razor blade on a chain about the neck?" "Yes I do. My, friend all the rage then." nnie had a !air of solid gold earrings in the sha!e of tiny razor blades. "hey were

""he razor blade, as you may or may not know, is associated with cocaine because a razor blade is used to cho! u! cocaine crystals into a fine !owder and s!read it into thin lines to make it easier to sniff into the nose." "#hat sort of !eo!le are you talking about?" "In the early $%&s, the use of cocaine was confined mainly to !o! stars. #ithin the grou!s that hung around with the !o! stars it became fashionable to wear a razor blade around the neck because it identified the wearer, by association, with the e'clusive !o! grou! sets." "You mean it was a signal that only those in the know could identify with?" ""hat&s right, and as !o! stars associate with fashion leaders the razor blade decoration was ado!ted by some of them( causing the razor blade to become associated with the to! fashion sets. "he razor blade decoration was then co!ied by !eo!le who co!ied the fashion leaders. "hese in turn were co!ied by others who were one ste! further removed again from the to! fashion set. )radually the fashion s!read out to the whole !o!ulation, as !eo!le in grou!s followed their own grou!&s trend setter, triggering the co!ying actions of other grou!s further and further away from where it all started. *y the time the craze reached the high street sho!s it had com!letely lost its association with cocaine and most of the wearers would have been horrified if they had been aware of its significance." "+ow does this relate to you buying dresses for your bouti,ue?" "It is a good model to e'!lain how fashions and trends s!read. Ideas starting from an influential grou! s!read through the !o!ulation because !eo!le want to identify themselves with others. )rou! leaders take ideas from the grou!s above them in a !erceived hierarchy and the grou!s follower their leaders& initiatives." "I get it. "rends and fashions s!read through the !o!ulation in the same way that ri!!les s!read out over a !ond when a stone is thrown into the middle. -o how can you benefit from knowing this?" If I observe !eo!le at the center of fashion and watch how their ideas trickle down to the grou!s my customers belong to, I can antici!ate their needs. I can arrange to buy my stock .ust before they need it?" "*ut I thought your bouti,ue was successful because you had an eye for what looks good?" "/o, I watch !eo!le. I look for grou!s. I try to distinguish between the leaders and the followers. "o be a successful fashion buyer, you have to look beyond your own immediate surroundings to see how it&s being influenced by the rest of society. "he world isn&t a ha!hazard conglomeration of !eo!le meeting and interacting with each other at random0 there is order and organization out there if only you can see it." The idea behind this simple model allowed me to break into the fashion business at a time when London was leading the world of fashion in the early /032's. 4ll that was needed was an appropriate communication strategy. "t began from a small bouti!ue " had in 5ewburgh 'treet, a little street that runs parallel to &arnaby 'treet. " called the shop ,'treet Theatre, and started off by buying dresses from some of the designers who were trading in Kensington +arket. 4t that time, Kensington +arket, the former hippie market in Kensington -igh 'treet, London, was populated by many graduates from the various London fashion colleges. ailing to get employment in the fashion industry they had set up their own little workrooms and retailed their products from stalls they rented in this market. 4s retailing was so precarious, most of them also wholesaled their products to bouti!ue owners like myself.

4s the business e$panded " could no longer get enough stock from Kensington +arket and had to set up a small workroom myself. " had a friend who'd worked for many years as a dressmaker and pattern cutter and " employed her to run the workroom. 'he bought a few sewing machines and other technical e!uipment for making dresses. 6ut, we were then faced with the problem of what to make. " didn't know how to 7udge what was currently in fashion, let alone know what the fashion was likely to be in the future, neither did the lady " had employed to run the workroom. 4lthough technically skilled, she had no more idea than " had as to what fashion designs to create. "'d noticed that of the clothes "'d bought from Kensington +arket, the items that sold best were those "'d bought from young trendy designers who were always out clubbing. 4s the &arnaby 'treet area was very near to the center of the London Rag Trade 8the streets 7ust to the 5orth of *$ford 'treet9 it was fre!uented by many trendy young designers. +ost of these were either fashion design students or graduate designers looking for work. There are probably as many young people aspiring to be fashion designers as there are aspiring to be pop stars. ashion design colleges all over the world turn out hundreds of thousands of fashion designers every year. :uite a considerable number of these are e$ceptionally talented and creative, but unfortunately, only a very small percentage ever make it into the commercial world of fashion where their designs are actually worn by people. Talking to some of them, " found they would be only too delighted to have an opportunity to create designs for my workroom. 'o, choosing on the basis of how trendy they were and which clubs they went to, rather than how skilled they might be at making dresses, " employed them on a freelance basis to create designs. +ost of the garments they produced were not very practical, but, the designs reflected the designer's interpretations of what they were seeing in the trendy London clubs. &ombining the essence of these designs with the professional skill of the lady who ran the workroom, many of these designs could be turned into very sellable and highly fashionable products. ;hat "'d produced, out of necessity, turned out to be an e$tremely effect design strategy. The young and ine$perienced designers were producing design information about the latest trends and fashions in the London's trendiest clubs. They weren't describing them or drawing them( they were producing samples that reflected the trends and at the same time adding a little originality. "t was the perfect information for the e$perienced dressmaker to work with. 5ot surprisingly, the shop began to ac!uire a reputation. The fashion press were visiting the shop and the ,'treet Theatre, designs started to appear regularly in the fashion pages of prominent fashion maga%ines and even in the fashion pages of national newspapers. "t wasn't long before this attracted the attention of other bouti!ues who began to buy dresses from us. "t also attracted the large multiples who offered us concessions 8sales space in their stores where they took a percentage of the takings9. The demand soon outstripped the capabilities of our small workroom and we had to use the services of a manufacturing company to make up our designs. ;ithin a few months we'd grown into a fair si%ed business. The way " was seeing it at that time was as a business made up of fle$ible modular units. ;e had many retail units, a wholesale unit, a workroom unit, a manufacturing unit and a nebulous creative unit. "t was this creative unit that most interested me because " saw it as the engine that was driving all the other parts. "f this creative unit ran out of steam all the rest of the units would grind to a halt. " then increased the number of designers who were producing the samples and asked them to produce at least one a week and bring them along to the workroom on riday afternoons. " also arranged for many of the sales staff to be in attendance so that we could hold a private fashion show# with staff and designers wearing the week's creations and strutting across the large fabric cutting table in the

workroom. 'ales staff and designers would then comment and vote on the selections. "n this way, the system had a constant flow of design input and a selection procedure. "t soon became apparent that the feedback from the staff was an important factor in this process and " started to employ people who were totally unsuitable as employees in the normal sense but who were invaluable in this interactive design selection process. They were club people# wannabe models and wannabe pop stars. "f fact some of them did make it. There were two who went off to become successful designers in their own right, another who became a highly paid international model. The most bi%arre of all the staff " employed at that time was a pop mad, gay guy who lived is a s!uat and always arrived late for work e$!uisitely made up and dressed like a woman. -owever, he was a great influence on not only the designs but the whole atmosphere of the company. -e didn't do much actual work e$cept for some imaginative window displays and spent most of his time on the telephone getting a pop band together. -e called his band ,&ulture &lub, and went on to become the world famous super star# 6oy .eorge. " had virtually no participation in any of the design side of the company. " tried as much as possible to keep my opinions completely out of the picture. " simply set the system up and let it self-organi%e and as a result ,'treet Theatre, became one of the most famous fashion companies of that time. "n retrospect, what " had done was to ignore the technicalities of manufacture, ignore the creativity of the designers and set up an information flow that came from the trendy London clubs, directly into the garment manufacturing unit.

It's about communication strategies

"t may be difficult to map this e$otic scenario across to e-business and e-commerce. The trick is to use an abstraction# e$tracting out the essence of the system, shorn of all the detail. The bottom line here is that an unconventional business approach had organi%ed people into a communicating framework. "t is !uite obvious that the real work was being carried out by the professionals# the lady running the workroom and the e$pert technicians in the manufacturing unit, but, it is not so obvious that these professional were working on designs that had evolved from the erratic and ine$pert opinions of a small group of totally unreliable people# most of whom wouldn't have any chance at all of being selected for a position in a respectable company. The significance of this can only be truly appreciated if seen in the conte$t of the whole of the Rag Trade. There are thousands of designers, wholesalers and manufacturers vying with each other for the attention of the public and the fashion press. 'ome of the companies are large, employing hundreds of people that included do%ens of top class designers with &<s as long as your arm. =et a motley crowd of amateurs had come from nowhere and got out in front. "t might be pertinent here to ask who was the designer or the decision maker. ;ho created the successful designs that took this company to the front in a highly competitive field full of e$perts> "t certainly wasn't me. "t wasn't any of the staff. "t was the system# designing itself. The success was not brought about by e$pert knowledge and skills 8although they were an essential part of the evolving organi%ation.9( success came through the creation of a suitably focussed communication network. "sn't this what the "nternet is about> "sn't it a perfect environment for creating imaginative communication strategies. There is the same common denominator - it isn't about the technology, it is about communicating with people.

Fast FashionD Retail Strateg" Fl"ing .ff the Rac&s

&aro, .( +art?ne% de 4lb@ni% +argalef, <?ctor

Publisher: 'pringer Original document: The effect of assortment rotation on consumer choice, and its impact on competition Year: A220 Language: Bnglish

#rint +o to source /nglish Feedbac" 7hare

The retail fashion industry has witnessed a revolution in recent years, with stores like -C+ and Dara surpassing .ap to become ma7or players in the market, with higher profitability than traditional retailers. 'o what do these firms have that traditional retailers donEt> These companies apply a relatively new business strategy known as Ffast fashionG# They introduce clothing collections based on the latest fashion trends but designed and manufactured !uickly and cheaply, to allow the mainstream consumer to take advantage of current clothing styles at lower prices. <ictor +art?ne% de 4lb@ni% of "B'B and elipe &aro of H&L4 4nderson 'chool of +anagement describe this strategy in FThe Bffect of 4ssortment Rotation on &onsumer &hoice and "ts "mpact on &ompetition,G which appears as a chapter in the new book, 1onsumer2Driven Demand and 3!erations Management Models. 4 key to the success of this business model, say the authors, is the role of assortment rotation I or the amount of variety and turnover I to increase sales and gain competitive advantage. Just how often a company should rotate its products is what the authors sought to describe. Assortment Rotation Is Desirable 4ssortment rotation is relatively une$plored in the literature, but the authors argue that this is what sets Ffast fashionG retailers apart from the rest. 4ssortment rotation represents a complete departure from the traditional two-season approach to fashion, keeping customers coming back to spend money on a regular basis. 4n article in the 'panish newspaper, 4l 5a6s, noted the changed buying patterns# F8&onsumers9 ac!uire clothes /A times a year, and every time we enter a store we want to see something new. *therwise, we get bored.G -aving 7ust two collections a year was a retail practice described as FJurassic.G "ntroducing new product lines more often boosts sales# The typical Dara customer, for e$ample, visits its stores an average of /1 times a year, as opposed to the average K.L visits across the industry. The authors recommend how companies can use assortment rotation to increase consumer spending in their stores. To do so, they use a multi-period consumption model, indicating the point when consumers become FsatiatedG I in other words, when they see no new assortment, and so begin consuming less at that particular store. Their findings show that for any retailer, some degree of assortment rotation is desirable. 6ut how often that rotation should occur depends on a companyEs cost structure and what the competition is doing. or e$ample, if the competition is not rotating its products, then a retailer could get away with changing its assortment only slightly. "f a competitor starts changing the assortment more often, then a retailer should shift its assortment rotation into full gear to steal some market share. 4s a result, a company with low rotation costs 8the cost of creating and distributing products !uickly9 is more likely to capture a greater chunk of the market than a company with high rotation costs. 4 successful retailer will know its competition and act accordingly. 6y keeping close tabs on the industry, it can select the right products to rotate. Retailers must strike the right balance between the pace of their rotations and cost structure. 4bove all, they must develop capabilities to manage variety efficiently.

Fashion !outi3ue !usiness Strateg"

To many people a strategic plan is something that only big businesses do( but it is far more vital for small businesses. =our ashion 6outi!ue 6usiness strategy will match the strengths of your ashion 6outi!ue 6usiness to available opportunities. To do this effectively, you need to

collect, screen and analy%e information about the current ashion 6outi!ue 6usiness sector.

=ou need to have a clear understanding of your ashion 6outi!ue 6usiness strategy and your ashion 6outi!ue 6usiness strengths and weaknesses so that you can develop a clear goals and ob7ectives. "n addition your ashion 6outi!ue 6usiness strategy has become more important because technology, competition and the lack of funding has made the ashion 6outi!ue 6usiness sector less stable and considerably less predictable. "f you are to survive and prosper, you should take the time to identify the niches in which you are most likely to succeed and to identify the resource demands that must be met.

Gro)th Strategies for Starting -# a Fashion !rand

by )rystal Logt, $emand *edia

7hare <77 #rint /mail

&ncrease your brandPs ex%osure by featuring it in stores.

9i"e most businesses, fashion brands need to create and execute gro th strategies to build the com%any and earn %rofits. 8hen starting your fashion brand, itPs im%ortant to forecast hat the next fe business 0uarters ill loo" li"e for your com%any, including any roadbloc"s and your strategies for dealing ith them. By laying out a business strategy at the start ith your goals and ob?ecti'es in mind, your brand ill gro more efficiently.

&itch to 'n%estors
+ro th often ta"es a large amount of ca%ital a ne business may not ha'e. Lenture ca%italists and certain ty%es of in'estment firms may be eager to Qbuy inQ to your fashion brand and hel% it gro by bac"ing your business and ideas. 8hen %itching to an in'estor, al ays ma"e sure you a%%roach him ith a ell(researched business %lan that includes all %otential business scenarios you might ex%erience in the next fe years and ho you may rectify %roblem areas. 7ell your brand and your ideas in business meetings to earn the trust and enthusiasm of in'estors.

&ublic (elations and )ar*eting

Eour fashion brand cannot ex%erience success if it flies belo the consumer radar. To gro your brand, itPs im%ortant to ma"e the %ublic a are of it. *eet ith retail com%anies to discuss selling your brand in bric"(and( mortar stores, in'est in ad'ertising cam%aigns in %rint %ublications and tele'ision, and sign u% to ta"e %art in trade sho s and festi'als here you can dis%lay items from your fashion line. $e'ise an interesting story behind your fashion brand and %itch this to ne s organiAations. An article or tele'ision segment on your ne business can increase your ex%osure to %otential customers.

'nno%ation
By offering something s%ecial or uni0ue through your fashion brand, consumers may be more inclined to %urchase your %roduct o'er a com%etitorPs. 9eading through inno'ation in the industry can be a ma?or gro th dri'er, states LF )or%., a branded a%%arel com%any. &nno'ation in'ol'es Qsomething ne that creates 'alue,Q according to LF. This could include %roducing clothes made out of a ne ty%e of fabric, se ing your clothing in a s%ecial ay or using creati'e ne gra%hics or sayings on your clothing.

+ire a ,onsultant
Business consultants often ha'e years of ex%erience in the industries they s%ecialiAe in. &f you lac" sufficient business or fashion ex%erience, you can hire a business consultant ho ill a%%ly her ex%erience to your fashion brand and hel% it gro . 8hen researching consultants, al ays chec" their credibility through legitimate user re'ie s and any information that can be gleaned from the Better Business Bureau.

Strategy
XF DESIGN STUDIO
Concept
XF located at Shanghai, aim to improve cultural communication and information spreading. By providing fashion design service and creating a education environment, and make China to be a creativity producer but not a pure producer. We believe that with the group service XF provide to ! countries "#S$#% & and China, 'apan, (orea) in #sia, with the target of making Chinese fashion to be in the front rank of the world, for the ne*t generation, we can make the best effort to reali+e young people,s dreams.

Strategy -$%. Fashion planning

Constitute the brand and market strategy analysis, investigation and collection of various types of fashion information. -arket development successfully. XF will predict the popular tendency one year ahead to find new popular element. Base on the trend and for the needs of customers, plan and develop new product to meet market demand.

Fashion /esign
#nalyse customers comprehensively to design products in favor of brand development. XF has staff with long factory e*perience, so in the design, we can make professional analysis in fabric, trimmings, style tailoring, and cost control.

Fashion 0attern
1n order to design styles meeting the market, the high standard for patterns 1s so natural. XF has the newest C#/ system and perfect design team, rich e*perience and perfect system management, which ensures the 2uality, 2uantity and lead time better.

Fashion 3raphic
4he proposal from 4 shirt printing to fabric printing, it is very important for graphic designers to catch the subtle feeling of patterns. XF can provide patterns what customers need, after discuss in detail and check precisely.

Fashion Sampling
1n the process of costume design, the procedure of sample production is indispensable. high5standard sample machinists with rich e*perience, can make re2uired samples immediately and communicate with factory about technology. #t the other hand, we can also analyse pro6ect, proposal about sewing and cost.

Brand licensee
%ow X7F has the agency for a well5known brand, for customers of brand agent, XF can provide background support from initial filing to marketing and sales strategy, and reach the final goal together.

Brand wholesale
For customers who want to sell cloths in China or 'apan, XF provide all background support from sales channels. What it say is starting with brand analysis and market position, on the premise of good brand 2uality, make the best development plan in favor of whole market and market convergence.

$vent"Fashion Show8$*hibition
X7F also provide plan for fashion show, proposal and operation according to customers, sub6ect with limited staff in a short time. Show content what customers want perfectly

-arcket research
For merchandise customers need, do market research, screening and analysis in advance.

Culture $vent
9n cultural event, XF also plan high52uality seminars like :cooperate of industrial and school:, the forums of industry director and so on.

Reasons to +urchase

;ey benefits of buying this %rofile include:


+ain "ey insights into the com%any for academic or business research. ;ey elements such as 78=T analysis, cor%orate strategy and financial ratios and charts are incor%orated in the %rofile to assist your academic or business research needs. 7cout for %otential in'estments and ac0uisition targets, ith detailed insight into the com%anies- strategic, financial and o%erational %erformance. Financial ratio %resented for ma?or %ublic com%anies in the %rofile include the re'enue trends, %rofitability, gro th, margins and returns, li0uidity and le'erage, financial %osition and efficiency ratios. /0ui% yourself ith information that enables you to shar%en your strategies and transform your o%erations %rofitably. =%%ortunities that the com%any can ex%lore and ex%loit are siAed u% and its gro th %otential assessed in the %rofile. )om%etiti'e andBor technological threats are highlighted. ,nderstand and res%ond to your com%etitors- business structure and strategies, and ca%italiAe on their ea"nesses. 7tay u% to date on the ma?or de'elo%ments affecting the com%any. The com%any-s core strengths and ea"nesses and areas of de'elo%ment or decline are analyAed and %resented Eou get detailed information about the com%any and its o%erations to identify %otential customers and su%%liers. The %rofile analyAes the com%any-s business structure, o%erations, ma?or %roducts and ser'ices, %ros%ects, locations and subsidiaries, "ey executi'es and their biogra%hies and "ey com%etitors.

in the %rofile ob?ecti'ely. <ecent de'elo%ments in the com%any co'ered in the %rofile hel% you trac" im%ortant e'ents.

SWOT burberry: 1. Executive Summary Burberry, founded in 2456, is a leading international luxury brand. Burberry designs, manufactures and licenses apparel and accessories for distribution through its own stores and network of prestige retailers worldwide. +n early2774, the new management team at Burberry set out its strategy to reposition and revitali#e the brand, which resulted in significantly improved results and strengthened the base to build the business. 1ith continuous growth since last five years, Burberry has faced new challenges of brand sustainability and positioning in a volatile industry 8fashion9 where customer behavior is unpredictable. Thus, it requires a strategy that lays foundations for long&term growth and addresses the issues related to the challenges of product extension, management of the Burberry check and customer segmentation. To reach a recommendation, we come up with five criteria- Brand image' financial implications' :ompetitive advantage' ;arket growth and Ease of business. 3s maintenance of the brand image is always the fore most important factor for the luxury brands in order to sustain in the market we based our recommendation on this criterion. Based on the situational analysis, we narrowed to the following three alternatives-

2. Status quo . /eposition the brand through segmentation of the market <. /eposition the brand to target core customers after careful scrutiny and evaluation of alternatives, we recommended that Burberry should reposition its brand in order to target the core customers. By implementing this alternative, Burberry will be able to sustain its brand positioning in the fashion industry, which would provide competitive edge to Burberry over the other luxury brands. 3ssociation with high&end customers would further enhance the brand image, which would be very helpful to sustain the market growth in global arena. "urther, Burberry would be able to implement this strategy with much less efforts and with minimum financial implications. 2. Situation and Problem De inition Burberry, founded in 2456, is a leading international luxury brand. Burberry designs, manufactures and licenses apparel and accessories for distribution through its own stores and network of prestige retailers worldwide. +n early2774, the new management team at Burberry set out its strategy to reposition and revitali#e the brand, which resulted in significantly improved results and strengthened the base to build the business. 1ith continuous growth since last five years, Burberry has faced new challenges of brand sustainability and positioning in a volatile industry 8fashion9 where customer behavior is unpredictable. Thus, it requires a strategy that lays foundations for long&term growth and addresses the issues related to the challenges of product extension, management of the Burberry check and customer segmentation. 1ith the above issues in m ind, we will carefully analy#e the situation 8Section=9 and develop the alternative course of actions 8Section 59. "urther, using the recommendation criteria 8Section <9, we will evaluate each alternative 8Section69 and will come up with a recommendation in form of a business strategy that Burberry should adopt 8Section>9. "inally, we will prepare an action plan for the implementation of the recommended business strategy 8Section 49. !. "ecommendation #riteria +n order to evaluate the effectiveness of the alternatives and to reach a finalrecommendatio n, following criteria is devised. 2. Brand image- Burberry has gained a reputation as distinctive luxury brandwith interna tional recognition and a broad appeal. 3ny poor strategy at thisstage would hamper the b rand value of the company so the recommendation shouldstrengthen the Burberry brand. . "inancial implications- "irms often need to spend tremendous amount of money to make tangible changes to the product and packages, as well asintangible ch anges to brand$s image through advertising. Therefore, strategyadopted at this stage wou ld have a huge impact on the profitability of Burberry.So alternatives will be evaluated to r each the final recommendation that shouldhave minimum financial implications. <. :ompetitive advantage- 3nother key criterion is that of competitiveadvantage. "as hion industry is highly competitive and Burberry is facingcompetition from all brands i.e. from lower end to higher end, and fromlifestyle to fashion. Therefore, maintaining competitive edge in this market isvery important and hence, we would take this factor into account in reaching thefinal recommendation. =. ;arket growth- /epositioning and revival of the brand has led the companyto the fast growing path and Burberry would like to continue it in future.Business strategy adopted by Burberry at this stage would have longterm impacton its growth. Therefore, market gro wth becomes an important criterion forbasing any recommendation.

5. Ease of Business- Entrepreneurs always try to bring simplicity in theirprocesses and business. 3ccomplishment of different strategies requiresdifferent level of efforts. Ther efore, we will evaluate our alternatives on thedimensions of efforts. ;aintenance of the brand image is always the fore most important factor for theluxury bra nds in order to sustain in the market. is very critical. Therefore, ofall the criteria mentioned above, we have determined the brand image is the mostimportant criterion on which we wil l base our recommendation. $. Situational %naly&i& 're er %((endix % or SWOT analy&i& o )urberry* Since last five years, Bravo, chief executive of Burberry, renewed thepopularity of th e company brand by successfully implementing the combination ofkey strategic initiatives, including- ? :hanged the company name from Burberry$s to Burberry and introduced acontemporary logo and packaging.? +ntroduced the %rorsum designer collection for wom en in Spring 2777, whichfurther extended to menswear for the Spring !!! season. +n a ddition, thecollection provided valuable design inspiration for the Burberry and Thomas Burberry clothing and accessories collections. ? Enhanced the awareness and perception o f the brand among customers and the fashion industry through an image building global advertising campaign and extensive editorial coverage. ? ;ore modern merchandising focus and product extensions, transforming the fashion consciousness of the brand. ? reviewed the distribution channels, leading to more focused presence in premier retailers worldwide. 3dditional opportunities were addressed in the retail division with the closure of a number of no strategic Burberry stores, the opening of a new store in 0as @egas and a new flagship store in 0ondon. ? ;ore disci plined stock control, enhanced systems and a substantial reduction in the si#e of the range, leading to improved profitability. ? /enegotiation of (a panese licensee arrangements resulted in enhanced control of the brand, the confirmation of Burberry*s preeminent position in (apan and a very significant boost to profitability. 3nalysis of the marketing plan of Bravo on the four dimensions of marketing mix8=%s9 rev eals the Burberry$s present competitive positioning in the fashion industry. Bravo targeted to transform Burberry products as luxury products with functionality and positioning Burberry as a luxury brand, which is Aaspiration but also functional.B She promoted the Burberry brand in two phases. The first ad campaign conveyed the brand values as Aclassic and chic and fun and witty Aand second ad emphasi#ed on the fashion side by presenting Agood girl bad girlB theme. "urther, in order to present the brand$s new position in the market, she raised the prices and focused on a particular price point. http-CCtuoitre.vnCThong&tin&dich&vuC=!46<=CBurberry&khai&truong&cua&hang&lon&nhat&tai& @iet&Dam.html

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ToSn b\ cRa hSng WXlc thimt "m theo %hong c`ch Burberry mii, xny dong theo p tXqng cba trng gi`m Wsc s`ng tto )hristo%her Bailey, mang Wcm %hong c`ch Anh 'ii "hung gian hi[n Wti 'S nhang "hu trXng bSy tuy[t Wv%. -.a ch/ c0a h1ng2 Re* Hotel ' 8:: Ngu"Zn HuL T+%HC( .#era Vie) ' 8;8 [\ng ,h]i T+%HC( 0iamond +la7a ' ^Y L_ 0uTn T+%HC( .#era !usiness Center ' ;! TrHng Ti`n HH NMi

5hnn dw% "hai trXxng, "h`ch hSng Wmn mua sjm tti Burberry <ex !otel ngSy D(11 sy WXlc hXqng mzc Xu WMi .2G cho t{t c] mUt hSng H"hung bao ggm nXic hoa 6 mjt "knhI.

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#hXxng chnm lSm 'i[c cba chhng tui O)sng himnN t{t c] ' so hSi ldng cba "h`ch hSng. A9)A$= ( theo th_n thoti !y 9t%, ce ngha lS thin WXYng sjc Wv%. 9ugu cba A9)A$= musn gRi gjm thung Wi[% 'V ' Wv% trXYng tgn cng thYi gian. $ trong chhng ta q 'So Wwa 'w 'S hoSn c]nh ssng "h`c nhau ( giSu sang hay Wang bXxn ch]i, thSnh Wtt hay Wang %h]i WXxng W_u 'ii "he "hn, cdn tr hay WM ce turi ( ' Wv% l{% l`nh cba mi con ngXYi lS gi` trw "hung th %hb nhcn 'S sy mMi mMi Wi cng chhng ta trong sust cu\c WYi. Alcado thoc so mong musn WXlc lSm m\t c_u nsi chuyn t]i ' Wv% {yQ A9)A$= lS nhMn hi[u thYi trang cao c{% WXlc Wng "p b]o h\ tti Li[t nam. ThXxng hi[u A9)A$= ce mUt tti thw trXYng Li[t 5am t th`ng 5B.221 tti Wwa Wim W_u tin >1 ;im *M, Ba |nh, !S 5\i trq thSnh m\t trong nhang thXxng hi[u thYi trang cung sq cao c{% hSng W_u tti Li[t 5am.

#om(are )urberry+& mar,et (o&ition relative to t-at o it& com(etitor& includin.Polo/ #oac-/ %rmani/ and 0ucci. I& )urberry+& com(etitive (o&ition &u&tainableover t-e lon.1term2 W-y or 3-y not2 Since the early 27 !s, well after the Burberry check was visible to the public, Burberry has remained as a staple of both luxury and durability. This theme has remained consistent throughout the life of the Burberry brand and is a main driver in propelling Burberry into its current market position. 3ccording to Bravo, A1e focused on a particular price point and a particular bracket. 1e knew we didn$t want to be cutting&edge fashion' that was too tough, too rarified, too fickle, and too antithetical to Burberry. 1e also knew that we didn$t want to be )ust classical because there were enough of those brands.B 1ith this mindset, as well as extensive market surveying, Bravo knew that this was how to fill those missing gaps of the market. This niche resided Abetween labels such as %olo, /alph 0auren, and Eiorgio 3rmani in apparel and between :oach and Eucci in accessories this competitive position for Burberry is sustainable over the long term due to several reasons. Dot only due to its particular price points, but Burberry$s intensive consumer surveying is also important. Burberry has consistently focused on Aremaining true to FtheirG core brand valuesB and heritage to the Burberry brand. The main question posed in the ;arketing ;yopia isB 1hat business are you really inH A+t is said that the main way to ensure growth for your company is to concentrate on meeting customers$ needs rather than selling products. Burberry must focus on meeting its customer$s needs to sustain its long term success and growth. ;yth seems to be relevant in the fashion industry- AThere is no competitive substitute for our companies$ productB. Believing that Burberry$s products have no rivals makes the company vulnerable to dramatic innovations from others. %erceptual mapping is a graphics technique used by marketers that attempts to visually display the perceptions of customers or potential customers. Typically the position of a product, product line, brand, or company is displayed relative to their competition. The following perceptual or intuitive map is a visual display of Burberry and some competitions. Burberry$s market share in !!2 as rated against the top 2!! luxury goods players$ was5. I, putting them in = th place overall. This compares with 2=.=I market share for0@;. 82 st 9, 7.2I for %olo /alph 0auren 8 nd 9, and =.=I for the Eucci Eroup 85 th 9.3rmani falls short with a smaller percentage 8<.5I9 of the market. :oach is far below these and does not appear on the top 2!. +f you compare by the type of luxury good' in accessories- Eucci is at 2 I, :oach at 6I, %olo at =I, and Burberry at =I. 3nd for apparel considerations- %olo is at 7I, Burberry at <I, 3rmani at I, and Eucci at 2I.+t is clear here that these distinctions occur based on the depth and width of each company$s product line. :oach sells far more accessories 8i.e. leather goods9 than clothing, and %olo sells far more clothing than accessories. Burberry is almost balanced, and sells an equal amount of both, on their !!< annual report Burberry shows almost even income from women swear 8<<.<I9, menswear 8 >.=I9, and accessories 8 4.6I9."or this reason, Burberry$s competitive position is sustainable, as they have a decent demand for both accessories and apparel

Because demand tends to be unpredictable in the world of fashion, the fashion business is inherently risky. +n this context, consider the various changes Bravo has made since her arrival at Burberry. To what extent have these changes exacerbated or mitigated Burberry$s risk profileH Bravo$s changes, for the most part, have mitigated Burberry$s risk profile. 3ccording to Bravo, A1hen FsheG first started at Burberry, FherG goal was to make it great from a global perspective.B ;oreover, her goal was to Atransform Burberry from a tired outerwear manufacturer into a luxury lifestyle brand that was aspiration, stylish, and innovative. A.er first initial step was to hire a dedicated team who had experience in the retail environment, in order to make the Burberry brand succeed. :hanging the name from Burberry$s to Burberry, and introducing a new logo and packaging, keeps the brand fresh, changing the name also helps to reshape the brand from a person$s name to a concept that$s more homogenous. The first ma)or initiative was to first attract younger customers, while Aretaining Burberry$s core customer baseB. The new strategy is to Aassociate the brand with a more trend& conscious modern lookB while staying Atrue to our heritage,B says Bravo. This is a good strategy, aimed at ensuring future sales from retained customers. By doing this, the risk of losing the sales from the emerging young affluent buyers is diminished. 3fter their market research discovered gaps 8i.e. trendier market segments9 which Bravo felt could be filled, Burberry repositioned them selves to fill these gaps with the help of their new collections. The product line was reorgani#ed and reduced to less then a quarter of what it was and the product line were also updated with current fashions, including mini skirts and spike heeled boots. This also mitigates risk of lost sales if done properly, as competitors who appear more in line with current fashion, will not be able to steal away sales. To face their trendyCclassic dilemma all products have been categori#ed as either continuity items, or fashion& oriented. By doing this Burberry can also make their operations 8manufacturing, promotion, and distribution9 much more efficient J continuity items don$t need to be promoted as much, can be run off in large batches and will have a steady distribution, fashion items will be the very opposite. Klder licensing agreements that had been in place that churned out sub par products were eliminated, Bravo did this to eliminate the risk of looking cheap, and diminishing the brand$s reputation. :reative director :hristopher Bailey says that AFunless weG speak withal consistent voice, we run the risk of losing our brand credibilityB %ricing, especially in the fashion industry, is a complicated task. ;ost firms hope would hope its products demand are inelastic, thus allowing higher prices with little effect on demand. This curve would represent the wealthier and less cost conscious segment. ;ost firms demand curves resemble the elastic demand curve, as prices rise demand falls greatly. The raising of prices could be looked at in various ways. 3s Burberry is a luxury good, raising the price changes their position so that the items are more AexclusiveB and in Bravo$s words AaspirationB, this is to focus on a price point and further penetrate that market segment. These buyers, and core customers, are necessarily cost conscious, but they do care greatly about high&quality and fashion. 3nother initiative handled by Bravo, was the introduction of %rorsum, which is its hand tailored product line. This is a necessary move, to enter and compete with the higher end fashion markets that they were previously not focused on. The brand earned an award early in its stages, further propelling the image of Burberry as a luxury item. The new advertising campaign launched by Bravo, which included the hiring of an industry giant, photographer, ;ario Testino, and a world famous model, Late ;oss, is one of Bravo$s greatest accomplishments. 3lmost everyone associates Late ;oss with Burberry' this is an example of a great, consistent, advertising campaign. :oupling Late ;oss with British aristocrat Stella Tenant is a great reali#ation of their new strategy' Late ;oss symboli#es their push toward the trendy, and Stella Tenant is a symbol of their classic heritage. Dot only did Bravo need to execute a few Acosmetic changesB as well as determine a new customer base, she also felt that the next step would be to determine what and how many products could appeal to all consumers J both new and old alike. Therefore, new product lines were created ranging from Abandanas to miniskirts to spike&heeled boots,B thus birthing three new collections- women swear, menswear and accessories. These changes

seemed to have improved Burberry$s financial position as revenues almost tripled from !!! to !!< J even through dismal market conditions in !! . De&cribe )urberry+& cu&tomer ba&e. W-o i& )urberry+& tar.et cu&tomer2 4o3 could )urberry+& (o(ularity amon. non1tar.et cu&tomer& a ect t-e brand2 4o3 &-ould )urberry re&(ond to t-i& (o(ularity2 Based on Burberry$s pricing structure, product lines and brands, an insight is gained in its customer$s base, "irst and foremost, its customers are extremely fashion and brand conscious. They are also consumers who are willing to spend a large sum of change for a brand name product. +t seems that its new target customer is younger and a little riskier in fashion, than its current customer base who are older, more sophisticated and more brand conscious than fashion conscious. .ip&.op artists and actors have been increasingly wearing the designs. 3s discussed in class, English M.ooligans$ are examples of Anon&target customersB. This non&targeted group with its negative image can potentially adversely affect brand image. Burberry$s popularity among non&target customer is a double edged sword. +t allows Burberry to capture additional sales, and new segments of the market that it had not reali#ed. Degatively, it will alienate some core customers who do not want to share items with people in this other group. /ecently, Burberry has earned a certain taboo status in bars and nightclubs throughout Scotland and increasingly in England and +reland as well. 1hile it might appear the company has no control over who wears its :heck, it can be viewed as a negative impact of its new product strategyANefforts by /ose ;arie Bravo, the brand*s chief executive, to make the label more accessible may be fuelling a Burberry backlash, as an increasing number of bars, restaurants, and nightclubs across Scotland ban its designsB. %reviously aspiration as seen worn by 3udrey .epburn in Breakfast at Tiffany*s, the brand has evolved into an anarchic uniform adopted by football hooligan culture and other troublemakers = . This MTribal hi)acking$ is said to be the moment when a brand becomes the badge of belonging to a particular group that is not part of its target market. +t would appear to some that as Bravo$s attempts to populari#e the brand and increase its base clientele is beginning to erode a venerable market position and is ultimately having an affect on the brand$s exclusivity among its most desirable customers. This is not what Bravo had in mind when she was brought on from Saks "ifth 3venue to resurrect the Burberry brand. 3t the time it was the uniform for only for (apanese businessmen and the middle class, middle&aged fashion and brand conscious consumer. 3 spokeswoman for Burberry insisted that its hooligan appeal was )ust a little local difficulty- O1e need to keep this in perspective. The PL is only 25I of Burberry$s worldwide sales.O 1ith this in mind, Burberry must continue with the current strategy and remain steadfast in its check +n order to combat these non&targeted groups from hiring spokes personsCmodels to wear the Burberry brand that would make these M.ooligans$ not want to associate themselves with the brand. .iring models with a wide range of ethnicities, andCor creating images and connections these M.ooligans$ do not want to associate with may help to combat this problem as well. Burberry must maintain a positive image of the brand without seriously offending any of their new or current customers. +n extreme cases Burberry can issue official press releases stating their position on whoever is wearing their product S-ould )urberry be launc-in. )rit/ t-e ne3 (er ume line2 W-at ot-er (roduct cate.orie& &-ould )urberry be enterin.2 Burberry has been extremely successful in the many challenges faced with repositioning the Brand and making the Brand what it is today. Kne of these challenges was increasing and extending new product lines to consumers. Burberry, plain and simple, is a household brand name. +t appeals both to those customers who are regular everyday Burberry customers, as well as those who strive to only own one thing MBurberry$, or as quoted by Bravo as Aone&item aspiration check owners.B There have been many examples of established fashion brands extending into perfume lines. Burberry, with its well known and respected brand, hopes to achieve the lasting impact and mainstream acceptance like that of

:hannel Do. 5.Burberry holds an image of class, sophistication and elegance. Brand management is an incredible task, and Burberry seems to be extremely successful in these regard.3s Tucker states, Acheck management is a daily discipline. Everyone in the world who deals with us falls in love with it and wants to put it on everything.B The launching of Brit could have a negative impact however, and potentially diminish its brand image. Burberry$s core competency is in its exceptional clothing and accessories, not in fragrances, eyewear, timepieces, and children wear. ;oving into new product categories can lead to the same problem seen with the old licensing agreements' there could be a disconnection between the product categories as well as a high risk of inconsistent quality across the brand. To curb this problem, ABravo and her team reined in many of the older licensing agreements to curb inconsistencies in price, design, and quality across marketsB. ;anagement at Burberry must be steadfast in demanding and maintaining high expectations from these licensees who have the right to design products such as fragrances. 3s seen in the Burberry Brit advertisement, there is a strong visual appeal and linkage to its well&known classic design Burberry should strongly consider a stronger presence in the children swear market, as there seems to be a large demand for children$s good in the luxury market. 3s younger couples become more affluent, there is a need to purchase items for their children, in similar quality and price that they purchase for themselves. ;any of Burberry$s competitors have children$s clothing lines, and it has been shown to make a good compliment. Burberry can consider footwear in limited items, but like its competitors, make footwear an accessory. 3nother item that would gain market ground would be sport specific clothing. +nstead of )ust golf wear, there can be more professional sailing wear, or riding gear, or any other sport that its core customer engages in. There is a lot of room in Burberry$s current product categories to grow, moving into new product categories when its newer core products 8fashion clothing9 are still developing may lead to the customer feeling left behind.
Mar eting Strategy of !urberry Ltd" # )ecember /Mth, A2/2 6urberry .roup plc 8L'B# 6R6=9 is a 6ritish lu$ury fashion house, manufacturing clothing, fragrance, and fashion accessories. "ts distinctive tartan pattern has become one of its most widely copied trademarks. The company has branded stores and franchises around the world, and also sells through concessions in third-party stores. "t runs a catalogue business and has a fragrance line. -+ :ueen Bli%abeth "" and -R- The Nrince of ;ales have granted the company Royal ;arrants. 6urberry's trademark products are its trench coats, handbags, and fragrances. The &hief &reative *fficer is &hristopher 6ailey. The company is listed on the London 'tock B$change and is a constituent of the T'B /22 "nde$. 'tatistics# )ivision of .reat Hniversal 'tores plc ounded# /3LO Bmployees# A,L22 'ales# PAK2 million 8QKOO./ million9 8A2229 54"&# K/LAK ;omen's and .irls' &ut and 'ew 4pparel +anufacturing( K/LAA +en's and 6oys' &ut and 'ew 4pparel +anufacturing( MM3/M amily &lothing 'tores &ompany Nerspectives# 6urberry is an international lu$ury brand. "ts globally recogni%ed name, trademark, and signature trenchcoat have been synonymous with !uality and enduring style for over /L2 years. Key )ates# /3LO# Thomas 6urberry establishes his first shop. /30/# 6urberry begins selling clothing under the 6urberry name in London's -aymarket section. /020# The firm registers the ,B!uestrian Knight, trademark. /0/L# 6urberry ships its raincoats to Japan. /0OO# The firm becomes a wholly owned subsidiary of .reat Hniversal 'tores. /00M# The company begins using well-known model &hristy Turlington in its ad campaigns. /00O# 6y now, 6urberry has accumulated a record si$ :ueen's 4wards for B$port 4chievement and ranks among .reat 6ritain's leading clothing e$porters.

/001# /003# /000# A222#

Rose +arie 6ravo is hired as &B*. The 4sian economic crisis causes financial problems for the firm. 6urberry launches the Nrorsum collection. 6urberry breaks ground on a new flagship store in London.

&ompany -istory# 6urberry Ltd. is a manufacturer and marketer of men's, women's, and children's apparel, as well as accessories and fragrances. The 6urberry name is virtually synonymous with the tan gabardine raincoat pioneered by the company more than /ML years ago. ;riting for ;;) 8;omen's ;ear )aily9 in /030, 4ndrew &ollier described the garment as ,a mainstay in outerwear worldwide, that symboli%es all that is 6ritain# sturdy and unassuming, e!ually at home in fine hotels and muddy lanes., "n A222, 6urberry operated L3 company-owned stores, and its products were also found in department and specialty stores around the world. "n /000, the firm launched the Nrorsum designer collection as part of its efforts to reinvent 6urberry's lu$ury brand status. 4n icon of classic clothing, 6urberry has utili%ed licensing and brand e$tensions to appeal to a younger generation of fashionconscious customers. The company is a subsidiary of the Hnited Kingdom's .reat Hniversal 'tores plc, the very closely held Q0 billion credit reporting, mail-order, and retail apparel conglomerate. /0th-&entury *rigins ounder Thomas 6urberry was born in /3KL and apprenticed in the drapery trade, establishing his own drapery business in 6asingstoke, -ampshire, in /3LO. 4 sportsman, 6urberry was dissatisfied with the then-popular rubberi%ed mackintosh raincoat, which was heavy, restricting, and stifling, and thus unsuitable for e$tended outings. "nspired by country folk's loose ,smocks,, 6urberry designed a tightly woven fabric made from waterrepellent linen or cotton yarn. 4lthough sturdy and tear-resistant, this ,6urberry-proofed, cloth was lightweight and allowed air to circulate, making it considerably more comfortable than the heavy mackintosh. The tailor trademarked his cloth ,.abardine,, a 'hakespearean term that referred to shelter from inclement weather. 6urberry developed five different weights of gabardine# ,4irylight,, ,)ouble-;eave,, ,Karoo,, ,;ait-a-bit,, and ,Tropical., -e even patented ,6urberry-proofed, linings made from silk and wool. 6urberry was a shrewd marketer, employing trademarking and advertising to great benefit. "llustrated advertisements touting the clothing ,designed by sportsmen for sportsmen, drew customers to 6urberry's retail outlet, which was established in London's -aymarket section in /30/. -aving used a variety of labels to distinguish its garments from imitations, the company registered the ,B!uestrian Knight, trademark in /020, an insignia used continuously through the mid-/002s. 4lso employed in the corporate logo, this image represents several 6urberry ideals. The armor signifies the protection afforded by the outerwear, the ,&hivalry of Knighthood, reflects the company's own standards of integrity, and the Latin adverb ,prorsum, 8,forward,9 referred to 6urberry's innovative fabrics and styles. 4lthough the gabardine name was used under e$clusive trademark by 6urberry until /0/1, 6ritain's King Bdward, one of the first members of the royal family to don the gabardine coat, has been credited with populari%ing the 6urberry name by re!uesting the garment by name. 6urberry garments have en7oyed a loyal following among royalty and celebrities around the world ever since. The company's clientele has included ;inston &hurchill, .ary &ooper, Joan &rawford, -umphrey 6ogart, .eorge 6ernard 'haw, 4l Jolson, Neter alk, Ronald Reagan, .eorge 6ush, 5orman 'chwar%kopf, and Naul 5ewman. The company also boasts warrants 8endorsements of !uality9 from -er +a7esty :ueen Bli%abeth "" and -.R.-. The Nrince of ;ales. &onsidered a ,rite of passage, by some commoners, a 6urberry coat was a prere!uisite to a first 7ob interview. 5ew Nroducts for the 5ew &entury 6y the turn of the century, 6urberry offered an e$tensive line of outerwear for both men and women. The company designed hats, 7ackets, pants, and gaiters especially for hunting, fishing, golf, tennis, skiing, archery, and mountaineering. The garments' time- and weather-tested reputation for durability helped make them the gear of choice for adventurers of the late /0th and early A2th century. 6alloonists and early aviators wore specially made 6urberry garments that let neither wind nor rain penetrate. &aptain Roald 4mundsen, &aptain R. . 'cott, and 'ir Brnest 'hackleton wore 6urberry clothing and took shelter in 6urberry tents on their e$peditions to the 'outh Nole in the /0/2s. 6urberry established its first foreign outlet in Naris in /0/2 and soon had retail establishments in the Hnited 'tates and 'outh 4merica. "t e$ported its first shipment of raincoats to Japan in /0/L. "t was ;orld ;ar ", however, that brought widespread acclamation and fame to 6urberry. irst worn by high-ranking generals during the turn of the century 6oer ;ar in 'outh 4frica, the 6urberry coat soon was adopted as standard issue for all 6ritish officers. ;ith the addition of epaulets and other military trappings, the garments came to be known as ,Trench &oats,, so named for their ubi!uity and durability through trench warfare. *ne Royal lying &orps veteran wrote a testimonial noting, ,)uring the ;ar, " crashed in the 8Bnglish9 &hannel when wearing a 6urberry trench coat and had to discard it. "t was returned to me a week later, having been in the sea for five days. " have worn it ever since and it is still going strong., The company estimated that L22,222 6urberrys were worn and, perhaps more important,

brought home, by veterans. Rainwear became so important to 6urberry that the company soon whittled its lines down to little more than trench coats and tailored menswear for much of the A2th century. The notoriously conservative manufacturer stuck primarily to its well-known raincoats until the /0O2s, when a fluke led 6urberry to capitali%e on the garments' trademark tan, black, red, and white plaid lining. "t all started with a window display at the company's Naris store. The shop's manager spiced up her arrangement of trench coats by turning up the hem of one coat to show off its checked lining, then repeated the check on an array of umbrellas. The clamor for the umbrellas was so immediate and compelling that 6urberry's made and !uickly sold hundreds. This e$periment eventually led to the introduction of the cashmere scarf, also a perennial best-seller. 6y the /002s, 6urberry offered si$ different umbrella models and scarves in eight color schemes. This turning point in the company's merchandising scheme notwithstanding, rainwear remained 6urberry's single largest line into the late /012s and early /032s, and menswear continued to dominate. Bmphasis on B$ports and ;omen's and &hildren's 4pparel in the /032s and /002s 6urberry's e$port business increased dramatically during the /032s, fueled primarily by Japanese and 4merican craving for prestigious designer goods. 6y mid-decade, e$ports constituted two-thirds of the 6ritish company's sales, with more than one-fourth of e$ports headed to Japan and another /L percent sold in the Hnited 'tates. 6y /00O, 6urberry had accumulated a record si$ :ueen's 4wards for B$port 4chievement and ranked among .reat 6ritain's leading clothing e$porters. *verseas sales continued to grow by double-digit percentages in the early /002s. Reali%ing that ,4 fine tradition is not in itself sufficient today,, 6urberry sought to broaden its appeal to a younger, more fashion-conscious female clientele. 4cknowledging that ,The first thing people think of when they hear 6urberry is a man's trench coat,, H.'. +anaging )irector 6arry .oldsmith asserted in a /00M ;;) article, ,That's the image we're up against., *ne result was the Thomas 6urberry collection, first introduced in .reat 6ritain in /033 and e$tended to the Hnited 'tates two years later. The new merchandise was priced /L percent to K2 percent less than 6urberry's designer lines, bringing a blouse down to Q02 versus the normal Q/L2 to QAAL, for e$ample. =et it was not 7ust the price tags that set this ,bridge line, apart from the brand's more traditional garb. The collection emphasi%ed more casual sportswear, as opposed to career wear. ,Hpdated classics, included youthful plaid mini kilts, 7umpers, and snug ,7ean fit, slacks. H.'. advertising e$ecutive )avid Lipman called the line and its model, &hristy Turlington, ,modernly relevant, yet classically beautiful., 4t the upper end of the scale, 6urberry launched a personal tailoring service for the ladies. The company's women's division grew K2 percent from /00M to early /00O and was e$pected not only to overtake menswear, but to constitute more than 12 percent of total annual sales by /000. 4lthough it continued to manufacture 02 percent of its merchandise in 6ritish factories, 6urberry also started licensing its name, plaid, and knight logo to other manufacturers. 6y the mid-/002s, the 6urberry name added panache to handbags and belts, throw pillows and bo$er shorts, cookies and crackers, and fragrances and li!uor. &hildrenswear, stuffed toys, watches, handbags, golf bags, and even a co-branded <"'4 credit card sported the 6urberry check. 6urberry's efforts at product and geographic diversification appeared to be paying off in the mid-/002s. 'ales 8including a small sister subsidiary, 'cotch -ouse9 increased by more than one-third, from PA22.0 million in fiscal /00M 8ended +arch K/9 to PAO1.3 million in /00O. 5et income before ta$es grew twice as fast, from PM/./ million to P12 million, during the same period. ocus on 'trengthening the 6urberry 6rand in the Late /002s )espite diversification efforts, it became clear to company management that the 6urberry brand did not have the spark it once claimed. "n /001, Rose +arie 6ravo was elected &B* of 6urberry. -er e$pertise in brand management fit in with company plans to strengthen the 6urberry brand throughout the Hnited 'tates and Burope. 6ravo began focusing on product and design development and hired creative director Roberto +enichetti to head up this initiative. ;hile the company focused on positioning itself among leaders in the fashion industry, it began facing problems caused by its over-dependence on 4sian customers. 'ales decreased by 1 percent in /003 and profits tumbled in its retail and wholesale sectors due to the 4sian economic crisis. 4s a ma7or e$porter, 6urberry also was hurt by the strength of the pound. The company also began to slow down its shipments to the 4sian grey market--a market in which its products were sold cheaply or re-imported back to Burope and sold at a discount--and shut down three production facilities in the Hnited Kingdom. ;hereas this decision hurt the firm's profits in /003, management felt it would, in the long run, protect the 6urberry image. "n /000, the company profits continued to falter. 'ales decreased by /0 percent as the firm battled its 4sianrelated problems. 4midst its financial struggles, however, the company continued to focus on brand development and aggressive marketing. Hnder the leadership of 6ravo, 6urberry was once again re-emerging as an international lu$ury brand. The company launched its Nrorsum collections in /000, a new designer line that was

part of 6ravo's strategy. 4ccording to a June /000 )aily 5ews Record article, the launch was, ,The latest step in the 6ravo-directed makeover of the brand. *ver the last /3 months, she's trimmed its distribution, cut the number of licensees, and ramped up marketing and advertising. The goal is to turn the 6urberry name into a brand as hip as .ucci, Louis <uitton, or Nrada., 'uccess in the 5ew +illennium 4s 6urberry entered the new millennium, its financial results improved dramatically. The 4sian market recovered, its Buropean and 4merican markets grew, and its new brand strategy began to pay off. Trading profits increased /2K percent over the previous year and sales rose by // percent. The company also closed nonprofitable stores and opened new stores in Las <egas, 5evada and in Tokyo. 6urberry also opened a new three-floor flagship store in London that was /O,222 s!uare feet in si%e and featured new product lines including lingerie and swimwear. 4 new licensing agreement was signed with +itsui in Japan, securing a greater share of profits from that region, and the firm ac!uired its 'pain-based licensee--'pain was the firm's second largest market after Japan. 6urberry's parent announced in late A222 that it was planning an initial public offering 8"N*9 of the company's stock. .reat Hniversal 'tores did not consider the company one of its core businesses, and in light of 6urberry's recent successes, it considered an "N* much more lucrative than selling the firm. "n A22/, 6urberry management continued its aggressive brand strategy and focus on its potential in the Hnited 'tates and in Buropean markets such as rance and "taly. 6urberry's repositioning as a leading lu$ury brand left its management confident that it would remain successful in the future. Nrincipal &ompetitors# -ouse of raser plc( Nolo Ralph Lauren &orporation.

Essays24.com is one of the most comprehensive databases of essays, term papers, and book reports on the internet. ; 3et instant access to over < &,&&& papers. 5555555555555555 # proposal for a new market strategy for the 4homas Burberry =ondon perfume range .& 1ntroduction 4he organisation 1 have decided to propose a new marketing strategy for is 4homas Burberry. 4his organisation is a distinctive lu*ury brand with international recognition and broad appeal. 4hey design, source, manufacture and distribute high52uality apparel and accessories. Burberry was founded in Basingstoke, $ngland in >?@A they have a uni2ue heritage associated with 3reat Britain and position themselves as the authentic British lifestyle brand. From their founding, Burberry have established a reputation for innovation, 2uality and style through developments such as the invention of gabardine, which the organisation believe was the worldBCDs first weatherproof and breathable fabric and the creation of iconic products, including the trench coat and of the Burberry check. 4he product 1 have decided to develop a new strategy for is from the Burberry perfume range. Burberry has a range of fragrances such as Burberry Brit, Burberry 4ouch, Burberry Weekend and more. 4he fragrance 1 will be focusing on is Burberry =ondon. 1 believe that it is time for a new marketing strategy for the Burberry =ondon perfume, because although the perfume was introduced not long ago5 the

menBCDs fragrance was launched in EEF and the womenBCDs fragrance was introduced in EE?5 sales are not increasing as fast as hoped, probably due to better marketing by other perfume brands in competition with Burberry, 1n particular 1 feel that the overall packaging and the bottle design is too plain and does not really persuade the consumers to buy the product. 4herefore 1 feel that we need to give this product a new market strategy and re5launching it with more distinctive packaging. 4he main aims for my new strategy areG 5 HI 4o increase overall sales for the Burberry =ondon perfume range HI 4o breathe new life into the product life5cycle by re5launching it HI 4o increase market share against competitors brands HI 4o improve the product and business image e.g. packaging 4he strategy 1 have proposed embodies the main principles of marketing. 1n developing my new market strategy 1 have tried to ensure thatG 5 . 4he new product meets actual and potential customers needs by communicating with the customers5 1 have tried to ensure that Burberry fully understand customer needs and the changes taking place in the buying population e.g. the age structure of the population, tastes and preferences, incomes, etc. 1 have done this by conducting my own market research. 4he knowledge 1 have gained has been translated into a better product for customers. <. 1t is based on an understanding of the customers5 #gain market research is the key role here, by making sure that 1 have undertaken primary and secondary research. Before deciding on my new strategy 1 can be confident that it is based on an understanding of the market for my product. !. 1 have taken into account the competition by understanding them and keeping ahead of them5 4he perfume J cosmetics industry is a large marketA 1 have tried to ensure that Burberry stay ahead of competition by researching into the 0$S4 J SW94 analysis, and taking into account the other large brands and their approach to selling a product, brands such as =acoste, Kenri =loyd, Fred 0erry etc L. 1 have taken into account other e*ternal factors which influences this market5 1 have also tried to ensure that 1 take into account the other factors, which influences the perfume J cosmetics industry, factors such as recent market trends, shown in both my SW94 J 0$S4 analysis. ?. 1 have taken into account internal influences, which may affect the organisation and its ability to implement the strategy5 -y SW94 analysis has identified the strengths and weaknesses of the Burberry organisation. <.& Current -arket Situation <. -arket si+e and structure 4he .( retail market for the cosmetics and fragrances covered by the key note report was estimated at .L@billion in <&&<.4he figure below represents an increase of L.LM on the value for the previous year.

4able G 4he .( market for cosmetics and fragrances by value at current prices "NOm at rsp), EE>5<&&< EE> EEE <&&& <&& <&&< Cosmetics ?>?.? @<&.& @@&.& F L.& F?&.& Fragrances @?&.& @??.& @@<.? @>&.& F&?.? 4otal ,<!?.? ,<F?.& ,!<<.? ,!EL.& ,L??.? M change year5on5year 5 !.< !.F ?.L L.L Psp5 retail selling prices 4he perfume J cosmetics industry is a very large industry. 4he .( retail market for perfumes J fragrances grew by L.LM between <&& and <&&<, to a value of NO .L@bn. Consumers base their choice of cosmetic or fragrance on the image of a particular brand, as well as on the product,s function. Fashion plays a key role in defining this image, and in5store presentation and method of distribution are also important factors. #ccording to 1nternational Flavours J Fragrances, the failure rate for new fragrances is appro*imately E&M after the first year and EEM after ! years, so for a fragrance to maintain its popularity for decades, brands such as Chanel %o. ? and -iss /ior, is no mean feature. Qast promotional spending is necessary to maintain an established brand, let alone launch a new one. 1n the year to September <&&< for e*ample, NO!L.<m was spent on advertising women,s premium fragrances alone, which is a great deal of money for promoting a brand. 4able <G 4he .( market for fragrances by sector by value at current prices "NOm at rsp and M), <&&< Qalue "NO) 4otal "M) Females fragrances L@?.? @@.& -ales fragrances <L&.& !L.& 4otal F&?.? &&.& Fine or premium fragrances account for around two5thirds of the fragrance market by value and a third of the market by volume. -en,s fine fragrances tend not to command such high prices as those aimed at women, but male fragrances "premium and mass market combined) still accounted for an estimated NO<L&m or !LM, of total .( retail sales of fragrances in <&&<. 1n total, .( retail sales of fragrances increased by !.>M between <&& and <&&<, to an estimated NOF&?.?m. Psp5 retail selling prices 4he rate of growth in sales of men,s toiletries has slowed significantly, and various efforts to encourage the market "such as Boots for -en shops and =yn* Barber Shops) have met unsuccessful. Women on the other hand are keen to try new scents, while still remaining loyal to their old favourites. #ccording to the publication Soap, 0erfumery J Cosmetics in -arch <&&<, most women will generally have at least three fragrances they usually use and possibly matching body lotion and sprays as well. 4here are many ma6or competitors in the perfume J cosmetics industry, such as Chanel, =acoste, Kugo Boss, Fcuk etc. 9n the retail side the market leader, Boots, is coming under increasing pressure from the grocery multiples, but its attempts to differentiate itself and specialise in more premium markets have yet to prove

particularly successful. 4he 0erfume Shop chain, owned by the -erchant Petail 3roup on the other hand, goes from strength to strength, recording a F>M increase in profit in its most recent half5year reporting period. 4his period did not even include the Christmas season. 4he market is increasing rapidly. 4he fact that the .( has an ageing population is a disadvantage for a market in which young people are the heaviest consumers. Kowever, today,s older consumers have a greater interest in personal appearance and most importantly have the disposable income to purchase premium products that claim ama+ing results. -odernism is the key in this mature and competitive industry and recent years have seen a wide range of products claiming defensive and uplifting 2ualities. 4he consumer base will also continue to increase as children become interested in their appearance and in fashion at an early age. Figure illustrates how the .( market for cosmetics and fragrances has grown since EE>, and how it is forecast to grow by <&&F. 4he rate of growth is e*pected to remain fairly consistent over the period. Kowever <&& and <&&< benefited from particularly strong consumer spending and the introduction of more products that claim to do more than 6ust beautify the body or make it smell pleasant will give an additional boost to sales in the direct future. Figure G 4he .( -arket for Cosmetics and Fragrances by Qalue at Current 0rices "NOm at rsp), EE>5<&&F rsp BCR retail selling prices B-PB 1nternational,s <&&< 4arget 3roup 1nde* "431) survey found that lipstick and female fragrances were used by the vast ma6ority of women in the .( and male fragrances by almost three52uarters of men, but figures from the 9ffice for %ational Statistics "9%S) confirm that spending on beauty products and treatments is optional. #ccordingly, the industry along with many others will be hoping that the forecast downturn in the .( economy is short5lived. <.< (ey 1nfluences on the market 0$S4 #nalysis 4o find out all the key influences on the market 1 have analysed and produced a 0$S4 analysis for the Burberry =ondon perfume. # scan of the e*ternal macro5 environment in which a firm operates can be e*pressed in terms of the following factorsG HI 0olitical J =egal HI $conomical HI Social HI 4echnological 4he short form 0$S4 "or sometimes rearranged as S4$0) is used to describe a framework for the analysis of these macro5environmental factors. # 0$S4 analysis fits into an overall environmental scan as shown in the diagram belowG $nvironmental scan $*ternal analysis 1nternal analysis -acro5environmental -icro5environmental

0$S4 0olitical J =egal factors 0olitical J legal factors include government regulations and legal issues and define both formal and informal rules under which a firm must operate. Some e*amples includeG HI 4a* policy HI $mployment laws HI $nvironmental regulations HI 4rade restrictions and tariffs HI 0olitical stability $conomic factors $conomic factors affect the purchasing power of potential customers and the firms cost of capital. 4he following are e*amples of factors in the macro5 economyG HI $conomic growth HI 1nterest rates HI $*change rates HI 1nflation rates Social factors Social factors include the demographic and cultural aspects of the e*ternal macro5environment. 4hese factors affect customer needs and the si+e of potential markets. Some social factors includeG HI Kealth consciousness HI 0opulation growth rate HI #ge distribution HI Career attitudes HI $mphasis on safety 4echnological factors 4echnological factors can lower barriers to entry, reduce minimum efficient production levels and influence outsourcing decisions. 4echnological factors includeG HI PJ/ activity HI #utomation HI 4echnology incentives HI Pate of technological change $*ternal opportunities and threats 4he 0$S4 factors combined with e*ternal macro5environmental factors can be classified as opportunities and threats in a SW94 analysis. SW94 #nalysis # SW94 analysis provides us with a useful way of analysing the specific environmental forces that effect an organisation, the SW94 analysis can only

relate to an organisation not the market or industry. -y SW94 analysis will be aimed at the Burberry brand. SW94 is another abbreviation forG HI Strengths HI Weaknesses HI 9pportunities HI 4hreats Strengths and weaknesses are those factors to be found within the organisationBCDs internal environment, which affect its ability to use the opportunities available to it. 9pportunities and threats arise of something happening in the e*ternal environmental in which the organisation operates e.g. 0$S4 analysis. Strengths 4he organisations competitive strengths and attributes are as followsG HI /istinctive lu*ury brand with international recognition and broad appeal HI .ni2ue history and positioning as the authentic British lifestyle brand HI Kighly successful merchandising and marketing strategy across both apparel and accessories HI /iversified distribution channels and geographic profile HI 0roven international management team HI Strong business momentum with multiple growth opportunities HI # variety of new products are launched every year HI 4he potential market is growing as children become interested in cosmetics and fragrances at a younger age, and as older women and men retain a pride in their appearance so therefore Burberry is recogni+ed HI 4he choice of brands is e*tensive and the price range is wide Weaknesses $very organisation also has weaknesses as well as strengths. 4he Burberry brand weaknesses are as followsG HI 4he Cosmetics J Fragrances market is highly competitive on both its manufacturing and retailing sides. Burberry have ma6or competitors such as Boots etc HI Qast promotional spending is needed to maintain the distinction of well5known brands, let alone to launch new products HI 4he safety and effectiveness of products that Burberry introduce are constantly under inspection HI 4he market is fashion5led, and products can 2uickly fall from favour HI #ccording to industry insiders, the failure rate for new fragrance launches is as high as E&M after the first year, so therefore so much money is spent on PJ/ when you donBCDt really know weather you are going to make profits back HI Sales of fragrances in particular are seasonal, centred around Christmas, so sales for the Burberry brand do decrease during some seasons HI PJ/ shows that Soap, 0erfumery J Cosmetics in -arch <&&<, there is no shortage of cosmetic products for the ethnic market, but there is a problem with

distribution. -any consumers either have to use mail order or travel to towns with large ethnic populations. 9pportunities 4he Burberry organisation has opportunities to aim for, these are as followsG HI Women,s maga+ines have a significant influence on sales. #ny approval of products by beauty editors encourages purchases. 4herefore Burberry can promote their products in womenBCDs maga+ines HI 4oday,s BCSolderBC consumers aged ?& and over, are fre2uently financially secure. -arketers are increasingly realising the value of targeting these older people, the organisation have opportunities such as targeting the older population HI 9ne of the strong areas of growth is...