In the world luxury market, Burberry can be said to be a very well-known luxury company, has always been a second-tier luxury brand in the market occupies an important position, but just recently Burberry was rumored to be excluded by the FTSE Russell index, what is going on? Famous luxury, this is not going to work?
1. Will Burberry be excluded from the FTSE Russell index?
According to the 21st Century Business Herald, United Kingdom stock index compiler FTSE Russell issued a statement saying that the United Kingdom luxury brand Burberry was removed from the FTSE 100 index constituent stocks and included in the FTSE 250 index constituent stocks on September 23. The FTSE 100 Index of United Kingdom is considered a barometer of the United Kingdom economy, the index was created in 1984 and consists of the top 100 listed companies with the largest market capitalization in the United Kingdom stock market and is representative of United Kingdom large-cap stocks.
Burberry has been in the index for 15 years as the pride of United Kingdom companies. Having now been excluded from the index is a blow to the Burberry brand. Burberry's turmoil doesn't stop there, on September 3, Burberry once again announced two high-level personnel changes.
Jonathan Kiman, the marketing genius who took the helm at Gucci and shaped the soul of the brand at Versace, has been appointed as Burberry's Chief Marketing Officer (CMO) and will report directly to new CEO Joshua Schulman on September 9 in London.
与此同时，美洲大陆也迎来了一位新的掌门人，Laura Dubin-Wander，她曾就任于OTB北美CEO、Coach北美总裁及Christian Dior Couture的副总裁。
Second, well-known luxury goods are also not good?
What's going on with Burberry, a luxury brand once known for its classic waterproof trench coats, recently faced a serious challenge from being knocked out of the blue-chip FTSE 100 index by FTSE Russell?
First of all, in recent years, the uncertainty of the global economy has intensified, coupled with the impact of global public health events, the consumption power of the global luxury market has declined significantly. As an important market for luxury consumption, China's declining spending power has had a direct impact on luxury brands such as Burberry. The weakening purchasing power of Chinese consumers, coupled with a shift in consumer attitudes from brand-seeking to a greater focus on quality and personalisation, has made it difficult for traditional luxury brands such as Burberry to attract younger consumers.
In the 2024 financial year, Burberry's earnings report revealed the grim situation it faced, with brand sales falling 4% year-on-year to £2.968 billion, a figure that reflects Burberry's sales woes. The decline in sales is not only due to the global luxury market environment, but also highlights the shortcomings of Burberry's own brand strategy and product innovation.
Secondly, Burberry's decline in performance is not a short-term phenomenon, but a decade-long history. Since 2014, Burberry's product strength has been insufficient, unable to keep up with market changes and rapid iteration of consumer demand. By 2017, Burberry had embarked on a five-year downward journey. Even in FY2022, when all luxury brands exploded, Burberry's gains edged up by just 10%, well below the industry average.
In the past decade, Burberry has also made a series of transformation attempts, but the results have not been significant. The company failed to effectively respond to market changes in terms of new product development, marketing strategy, and channel layout, resulting in a gradual decline in brand image and market position. In particular, in China, Burberry has failed to fully capitalize on the opportunities of consumption upgrading and the rise of young consumers, missing out on important growth drivers.
Third, at present, the luxury market has entered a state of fierce competition. Major brands have increased investment to compete for market share through technological innovation, product design, marketing strategies and other means. However, Burberry is clearly lagging behind in this regard. Compared with other competitors, Burberry's products lag behind in terms of design innovation and quality improvement, and cannot effectively attract the attention and love of young consumers.
In addition, the competition in the luxury market is also reflected in the shaping of brand culture and values. As consumers become more focused on personalization and sustainability, luxury brands need to pay more attention to brand storytelling and brand culture communication. However, Burberry also failed to effectively communicate its unique brand appeal and values.
The challenges faced by Burberry are a microcosm of the problems that are common in the luxury industry. At a time when the global luxury market is facing changes, Burberry needs to deeply rethink and adjust its product design, brand strategy, market layout and other aspects to respond to the changing market environment and consumer needs. Only in this way will it be possible for Burberry to regain its strength in the face of fierce competition. #记录我的2024#