Burberry trails peers in China

Bloomberg

Burberry Group Plc is still waiting for new leadership to revive the brand, as it trails rival luxury-goods makers in the all-important Chinese market.
The shares fell as investors were disappointed by the British fashion brand’s latest quarterly sales in Asia, which MainFirst analyst John Guy called “actually pretty poor” in light of surging demand for luxury products in China.
CEO Marco Gobbetti, who built his reputation as a turnaround artist at luxury leader LVMH by revamping its Celine and Givenchy brands, tapped the latter label’s former designer, Riccardo Tisci, to refresh Burberry’s product offer and image. Tisci, who was known at Givenchy for selling luxury athleticwear alongside elaborate couture gowns, is slated to show his first collection for Burberry during September’s London Fashion Week.
Tisci succeeded Christopher Bailey, who’s preparing to leave the company after 17 years in which he modernised the trench-coat maker’s look but struggled to reconcile the brand’s high-end ambitions with its dependence on discount-prone department stores in the US.
While Bailey pinned Burberry’s ambitions for ready-to-wear fashions on big “see now, buy now” fashion shows with all products available for immediate purchase, Tisci wants to supplement shows with more frequent capsule collections that emulate the approach of streetwear brands.
“It’s a new way of communicating,” Chief Financial Officer Julie Brown said on a call with reporters. “We can expect to have more periodic product drops that would be more exciting, and sometimes unexpected by consumers.”
Comparable sales in Asia rose at a mid-single-digit rate in the quarter ended on June 30, Burberry said. Overall, the measure rose 3 percent, matching the average estimate of 20 analysts surveyed. Burberry’s revenue rose just 2 percent last year, compared with 13 percent growth at LVMH’s fashion division and a
25 percent jump for Kering SA.