BurBERRY, the Big APPLE, and more

Burberry to Stick to Big Cities
Updated November 7, 2012, 1:01 p.m. ET
By PAUL SONNE and KATHY GORDON

      According to the article written by Paul Soone and Kathy Gordon, Burberry Group PLC has decided to refocus the aim of the companies global presence. In doing so, they have decided to withdraw from second-tier cities, and revitalize twenty-five major cities worldwide.

     With the importance on major fashion cities worldwide, Burberry hopes to take advantage of locational demographics through a market developmental strategy.

     Sonne and Gordon stated: "The British trench-coat maker has been opening stand-alone stores for its sub-brands—Burberry Brit and Burberry London—in big urban areas such as New York and London, and has pumped money into glitzy flagship emporiums in big world cities that attract tourists and locals alike."

    In another ploy to grab hold of profits during tough economic times Burberry Group PLC is also seeking to push further into the cosmetic industry, in particular perfumes. A part of this plan entails the destruction of the licensing agreement between the company and Interparfums SA. In doing so, the company will be able to operate directly in cosmetics and perfume starting April 1st. This business venture will cost the company $232 Million alone.

   Despite the pricey decision, Sonne and Gordon exclaimed that: "It fits with Ms. Ahrendts's long-standing strategy of taking more direct control of the Burberry business to control the brand's messaging and operations. "


    Truthfully, I think this series of decisions will be incredibly vital to the future success of the company. In particular, I believe that focusing in on major cities allows the company to find the right demographics and much more appropriate market environment. Cities like New York are the Mecca of the fashion world. They are were the trends begin and where the trends end. If you can find success there, you are almost promising yourself positive results.
    Secondly, I consider the decision to break the licensing agreement. between the company and Interparfums SA, a step in the right direction. Obviously, the immediate effects do not show progress or positivity, however in the long term the company will have more power. This power will allow them to grow as they see fitting. With the help of the proper marketing team and products, this action can bring substantial growth to the companies cosmetic and perfume revenues.



Topics: Market Development, Place
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