Burberry brings back ‘check’ as new CEO seeks growth

Bloomberg

Burberry Group Plc is betting on growth in handbags and playing up its trademark check as new Chief Executive Officer Marco Gobbetti seeks to join the luxury industry’s turnaround.
At its first major runway show since Gobbetti took over in July, the trenchcoat maker showed off reversible tote bags decked out in its tartan plaid, including a £1,490 ($2,025) version lined in honey calfskin.
“We have already established a very good platform in accessories and leather goods, but I think we have a great opportunity there,” Gobbetti said in one of his first interviews since
joining Burberry from French rival LVMH’s Celine. “I’m very confident that will be a big area of development for us.”
In placing a priority on handbags, Gobbetti is borrowing from the strategy of LVMH’s Louis Vuitton and Hermes International, which generate much of their profit from leather goods and are bouncing back from a multiyear slump in Asia.
While Burberry’s latest quarterly results showed signs of strength in China, the brand is seeking some panache after cutting its accessibly priced Brit and London lines as well as pulling out of many US department stores whose heavy discounting held back its luxury aspirations.
Gobbetti took over the CEO role from Christopher Bailey, who has stayed on as creative director. To bolster creativity and luxury know-how, Burberry has also added two former Christian Dior executives—Judy Collinson as merchandising chief and Sabrina Bonesi as handbag designer.
The London Fashion Week show gave the first hints of Burberry’s new creative direction as Bailey integrates the recent hires into his team.
Gobbetti emphasized that Burberry will remain an apparel and outerwear brand, but said there were many more accessories in the pipeline. Other categories with a high potential for expansion include footwear, he said.