Burberry is in the midst of a transitional period: Last year, longtime creative director and (for a shorter time) CEO Christopher Bailey left the company. He was replaced in the CEO role by Marco Gobbetti from Céline, and in the creative role by Riccardo Tisci from Givenchy, who won't show his first collection until September, while product won't hit stores until next year.
In the meantime, the brand has been working to implement new business and retail strategies, as well as to keep product fresh while it awaits Tisci's overhaul. And it's doing okay: Comparable sales rose 3 percent in the fiscal year that ended March 31, according to an earnings report released Wednesday. Still, that's pretty far behind competitors like LVMH and Kering, who both saw double-digit growth in 2017, but turnarounds take time.
"In a year of transition, we are pleased with our performance as we began to execute our strategy. While the task of transforming Burberry is still before us, the first steps we implemented to re-energise our brand are showing promising early signs," said Gobbetti in a statement. "With Riccardo Tisci now on board and a strong leadership team in place, we are excited about the year ahead and remain fully focused on our strategy to deliver long-term sustainable value."
That strategy has included the acquisition of an Italian leather goods production facility as the company plans to strengthen its high-end handbag offering. It's also closing some of its smaller stores, explained Gobbetti during Wednesday's earnings webcast, while it invests in its more visible stores in influential markets, which will start to have a new look and feel. On the wholesale front, it's focusing on partnerships with influential retailers like Dover Street Market, where it launched an installation earlier this year. Online, Gobbetti emphasized Burberry's collaboration with digital marketplace Farfetch, which reaches more than 150 countries.
The brand says it's already seeing "early positive signs" from its new strategies. Investors seem on board, as well: Shares were up 4 percent Wednesday afternoon, despite seeing a 6-percent drop last week when Belgian billionaire Albert Frere announced he had sold his shares in the company.
In general, they've been up since Tisci's appointment in March — clearly there are high hopes for him to deliver on the business side, and we couldn't be more curious to see what celebrity-beloved designer comes up with.