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2019/20 ANNUAL REPORT

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2019/20 ANNUAL REPORT

CREATIVITY OPENS SPACES

“We continue to believe that our strategy is the right one. Given today’s uncertain global outlook, however, we will be as agile and flexible as we need to be to ensure we safeguard our business and protect our stakeholders wherever possible.”

gerry murphy

Chairman

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“Now more than ever, our strategy to anchor Burberry firmly in luxury fashion is key.”

MARCO GOBBETTI

Chief Executive Officer

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CREATIVITY OPENS SPACES

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CREATIVITY OPENS SPACES

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We believe in the power of creativity and are passionate about what we do. We combine this with a commitment to excellence.

For us, being Creatively Driven means:

  • We find beauty in every detail
  • Put passion and creativity in everything we do
  • Committed to excellence
  • Challenging the ordinary to pursue the extraordinary

We challenge ourselves to keep thinking ahead, creating the space to explore new ideas and possibilities.

For us, being Forward Thinking means:

  • An open space for imagination
  • Free to explore, push boundaries, pioneer
  • Unafraid to stand out
  • Our creativity drives us forward

We honour Burberry’s DNA, combining a strong sense of heritage with a desire to learn from the world. We are inspired by our past as we shape the future.

For us, being Proud of our Heritage means:

  • Inspired by our past, as we create our future
  • Globally minded, learning from others
  • Championing contrasts from royals to rebels
  • Representing Britain on the global stage

We are committed to nurturing an open, inclusive and united culture. Upholding a legacy of respect and belonging that stretches back to our founder.

For us, being Open and Caring means:

  • Harnessing strength in diversity
  • United to achieve common goals
  • Responsible, guided by our conscience
  • Upholding a legacy of respect and inclusivity
Open and Caring

Financial highlights

Alternative performance measures, including adjusting measures, are defined on page 88. Pro forma is an estimation of the FY 2019/20 results when applying the previous accounting standard for leases, IAS 17 Leases, to be consistent with FY 2018/19 reporting.

* Cash of £887m at March 2020 includes £300m drawn from the Group’s revolving credit facility in March 2020.

STRATEGY

Launched in November 2017, our strategy focuses on rooting Burberry firmly in luxury fashion. We believe that by fostering the creativity that has driven our brand since its inception, we will introduce Burberry to new customers while delighting our existing customer base. In doing so, we aim to deliver sustainable long-term value for our shareholders.

TWO PHASED TRANSFORMATION JOURNEY

BUILD THE FOUNDATION
  • Commence programme to re-energise the brand
  • Rationalise and invest to align our distribution
  • Manage creative transition
ACCELERATE AND GROW
  • Complete full brand transformation, including alignment of distribution
  • Accelerate growth

Before the outbreak of COVID-19, we were on track to move to the second phase of our transformation in FY 2020/21. While the overall strategy for Burberry remains unchanged, in the short term, we will continue to strengthen the brand, complete the product transition and adapt our strategic initiatives to address the current market environment.

PROGRESS
DURING THE YEAR

  • Creatively Driven
  • Open and Caring
  • Proud of our Heritage
  • Forward Thinking
  • RUNWAY SHOWS

    VIEW

    RUNWAY SHOWS

    Product is at the heart of our strategy. We continue to invest in the highest quality materials and exquisite craftsmanship to ensure Burberry designs delight our customers season after season.

    Over FY 2019/20, our runway collections and new takes on our classic lines sparked excitement and renewed interest in the brand.

    Memories, our Autumn/ Winter 2020 collection, was inspired by Riccardo Tisci’s reflections on his formative years as a young designer, and is imbued with references to the places he visited, the people he met and the music he listened to at the start of his career.

    Meanwhile, Evolution, our Spring/Summer 2020 collection, featured Victorian-inspired silhouettes, combining innovative design techniques and fabrics with classic touches and nods to the brand’s heritage.

    Takes on Burberry's past were also evident in our accessories introduced in the year. The Supersized Pocket Bag, which was unveiled at our February show, is a modern twist on a design from our archive (see page 48 of the Annual Report), for instance. The Olympia bag collection, the Society holdall and a duffle bag in plaid were also shown at the February show.

    The creative force behind Burberry's transformation is being recognised externally. Riccardo Tisci was named 2019’s Fashion Innovator by the Wall Street Journal. Burberry has also consistently been listed in the top 10 hottest brands in the Lyst Index, reflecting our growing brand heat both on social media and online overall.

    While encouraging creativity to thrive, we also keep Burberry's Responsibility Agenda top of mind at all times. For instance, we ensured both of our 2020 runway shows were carbon neutral.

    In addition, on the day of our Autumn/Winter 2020 show in February 2020, we announced the creation of our Regeneration Fund, which is designed to support a portfolio of carbon insetting projects to tackle the environmental impact of our operations. The projects will enable us to store carbon at source and remove it from the atmosphere. Kick-starting the programme, Burberry has partnered with PUR Projet to design and implement regenerative agricultural practices with some of its wool producers in Australia. The project will work at farm level to improve carbon capture in soils, enhance watershed and soil health, reduce dryland salinity and promote biodiverse habitats.

    Strategic Pillar: Product

    POP-UP SPACES

    VIEW

    POP-UP SPACES

    Pop-up stores, whether standalone doors or themed areas in store, provide an opportunity to connect with customers in immediate and surprising ways. They allow us to display new products and collections in creative ways to inspire the customer. As part of our FY 2019/20 marketing programme, we opened over 25 pop-ups in influential luxury fashion cities, including Dubai, Tokyo, Paris and London.

    To support our refreshed Thomas Burberry Monogram, we installed a series of themed spaces within our stores. These performed particularly well, with notable increases in sales and traffic in the stores hosting this type of activation.

    To showcase the inspiration behind the Spring/Summer 2020 collection, in February and March, we arranged takeovers of the windows and atrium at the Printemps department store in Paris and collaborated with Selfridges The Corner Shop in London. The pop-up at The Corner Shop was a custom-built space celebrating our rich history in discovery and exploration. Recalling an era when Burberry’s protective gabardine was favoured by polar pioneers, we created an abstract snowy landscape featuring silver mirrored cubes and expedition sleds with Burberry silk scarves for sails. The installation included model penguins, which were brought to life through an augmented reality (AR) experience.

    The penguins were a reference to famous pioneering polar explorers, such as Sir Ernest Shackleton, who wore Burberry while exploring the Antarctic at the beginning of the 20th century.

    Strategic Pillar: Distribution

    INTRODUCING GAMES

    VIEW

    INTRODUCING GAMES

    In October 2019, we launched our first online game, B Bounce. This brought the gaming experience to customers globally on Burberry.com. Gamification, which is the use of elements of game design in non-gaming contexts, is becoming a powerful source of real‑world inspiration for luxury costumers. It offers another opportunity for us to inspire and connect with the Burberry community online.

    In this engaging and playful experience, which was built in-house by our digital team, players raced a deer-shaped character to the moon using supercharged Thomas Burberry Monogram puffer jackets. Players competed for special B Bounce prizes, with winners awarded custom-made GIFs and virtual Burberry puffer jackets edited onto a digital picture of their choice. The first prize was a real jacket from the 2019 Burberry puffer collection.

    In the first three months, B Bounce was played 1.5 million times in 40 countries. Building on the success of the game, as part of our 2020 Lunar New Year campaign in January, we launched our second game, Ratberry.

    We have previously experimented with gaming in China, but B Bounce is our first playful extension into a format which allows us to entertain and connect with our new, younger customers around the world. Such activations offer an opportunity for our customers, who are living in increasingly gamified environments both online and offline, to join the Burberry community and explore our products in this way.

    Strategic Pillar: Digital

  • DIVERSITY AND INCLUSION

    VIEW

    DIVERSITY AND INCLUSION

    Burberry is an open and caring employer, which aims to offer our employees, representing almost 120 nationalities across 34 countries, an optimal working environment where they feel valued and appreciated. In November 2019, we launched an Internal Diversity and Inclusion Council. The 12 members of the council were recruited from throughout Burberry’s operations and are reflective of our employee population. The council, which will convene remotely four times per year, is tasked with acting as an internal sounding board for Burberry on matters pertaining to diversity and inclusion.

    In addition, an external Cultural Advisory Council was formed in December 2019 with the aim of gaining insight into our external environment from diverse perspectives.

    Comprising six experts from various fields, including academia and the arts, this council will convene remotely three times a year and its findings will be fed back to the Board. The Cultural Advisory Council will communicate with the Internal Diversity and Inclusion Council regularly to share insights and findings.

    We continue to focus on evolving strategies for recruiting and developing talent, which promote our cultural values and ensure diverse representation across the business. We are reviewing our human resources systems to ensure that additional infrastructure, which will simplify our processes, is considered in the future. As part of championing meaningful partnerships and bringing different perspectives to Burberry, we are developing multi-faceted programmes to mark key calendar moments. These programmes provide an opportunity to raise awareness around our commitments and further engage with our employees.

    One of these moments was International Women’s Day 2020. We held wideranging panel discussions and hosted young ambassadors from The Prince’s Trust Women Supporting Women initiative in the week preceding Sunday 8 March. Panellists included Burberry leaders from different areas of the business, as well as experts from other industries who provided external perspectives. The programme of three panel discussions touched on themes around the career journeys of different women at Burberry, how men can be advocates for change and the importance of intersectionality and identity. We saw strong participation in our International Women's Day panels, both online and in person. Video recordings of the discussions were also made available on our internal site, Burberry World. In addition, other regions celebrated International Women's Day with their own internal panel discussions and donation activities.

    The young ambassadors from The Prince’s Trust, many fashion entrepreneurs themselves and participants in Women Supporting Women programmes, got a chance to talk to the panellists after the sessions and went to the Regent Street flagship to learn more about Burberry as a brand.

    Later this year, we are launching our new diversity and inclusion strategy, which is aligned with our wellbeing strategy. We have already started rolling out digital training on unconscious bias for all employees.

    As of March 2020, the representation of women and men in the workplace is set out below:

    Total Number of Women Percentage of Women Number of Men Percentage of Men
    Executive Committee 11 3 27% 8 73%
    Leadership (Director and above) 329 174 53% 155 47%
    All workforce 10,161 6,755 66% 3,406 34%

    Strategic Pillar: Inspired People

    WELLBEING

    VIEW

    WELLBEING

    We have continued advancing our Inspired People Agenda responding to feedback from our annual Employee Engagement Survey. In FY 2019/20, our employee engagement rose by 1% overall to 75%, with 87% of people proud to work at Burberry and 82% motivated to go above what is expected to make Burberry successful. We believe that wellbeing is the responsibility of the organisation, its leaders and each employee. In FY 2019/20, we focused on three key initiatives to improve employee wellbeing: mental health awareness, managing energy and providing employees with tools that empower them to manage their professional lives more effectively. We saw increased engagement around World Mental Health Day on 10 October 2019 as we encouraged teams to talk about their mental wellbeing. This sparked an increase of over 300% in traffic to our Employee Assistance Programme (EAP), while over 280 #OneChange posts appeared on our Burberry World internal intranet.

    Later in the year, we announced a new inclusive global parental leave policy, which provides a minimum of 18 weeks' paid leave to all new parents. In addition, as part of our phased return to work programme for new parents, colleagues are able to work four days per week while receiving full pay during a four-week period. The policy launched on 1 April 2020.

    Strategic Pillar: Inspired People

  • ADOPTING A LOCALISED CONTENT APPROACH

    VIEW

    ADOPTING A LOCALISED CONTENT APPROACH

    During FY 2019/20, we continued to pursue a communications strategy incorporating marketspecific content and collaborations with local media partners to improve messaging relevance for consumers. For instance, to mark the launch of the Autumn/Winter 2019 campaign, we collaborated with Nowness (UK, US, China), Dazed (Korea) and Mille (UAE) to bring the brand to life with local audiences. In November 2019, to celebrate the opening of our new flagship store in Tokyo, we decorated local metro stations and streets with the limited-edition pistachio Thomas Burberry Monogram print.

    We chose Lunar New Year as an opportunity to connect with our Chinese consumers in a festive way. Brand ambassador Zhou Dongyu starred in a vivid red campaign alongside models He Cong and Liang Jiyuan. We also introduced the Ratberry game (read more on page 40 of the Annual Report) and published a WeChat content series exploring Lunar New Year customs and how young people today spend the traditional festive period. In a series of short videos, Ratberry interacted with a number of celebrities on the social platform Weibo. This activity contributed to increased brand heat across our priority social platforms.

    We have also increased investment in localised content to communicate in a more authentic and relevant way with our consumers. In August 2019, our campaign for the Qi Xi Jie festival in China (similar to Valentine’s Day) was one of our most successful campaigns to date, with over 200 million views.

    For our Thomas Burberry Monogram campaign, we devised our TB challenges, which encouraged viewers to make the shape of a T and B with their hands on Douyin and TikTok, generating over one billion views. This enabled us to connect with young consumers in a way that felt authentic to them. Burberry is the first luxury brand to stage a major campaign on TikTok.

    Strategic Pillar: Communication

    INSPIRED BY THE BURBERRY ARCHIVE: THE POCKET BAG

    VIEW

    INSPIRED BY THE BURBERRY ARCHIVE: THE POCKET BAG

    Burberry's history continues to act as a rich source of inspiration for our brand. Our design team regularly explores the Burberry archive, allowing our heritage to be an influence on our new collections. For instance, the Pocket Bag, a key piece from our Spring/Summer 2020 campaign, was inspired by the Michelle, a Burberry bag sold between 1981 and 1990. Also known as the Michelle Shopper, the soft luggage-style bag featured leather details and the Burberry Check, one of our registered trademarks. The modern version has been updated with a distinctive front pocket, which inspired its moniker. The Pocket Bag exemplifies how our new collections celebrate our heritage.

    Strategic Pillar: Product

    TRENCH BESPOKE

    VIEW

    TRENCH BESPOKE

    Building on our brand’s heritage and our strong connection with our founder Thomas Burberry, we have continued to enhance our Trench Coat offering. This Burberry icon was given a fresh interpretation in FY 2019/20 with the launch of Trench Bespoke. Designed to be an elevated in-store experience, our customers have the option to order a Trench Coat to their specifications through a private consultation.

    Offering this service reasserts Burberry’s ownership of the trench category. Trench Bespoke drives a desire for a timeless and relevant icon among a new fashion audience.

    Strategic Pillar: Product

  • AUGMENTED REALITY

    VIEW

    AUGMENTED REALITY

    In line with Burberry’s longstanding commitment to digital innovation, we are embracing Augmented Reality (AR) as a means of connecting, engaging and inspiring customers. Our creative team works in a "test and learn" manner, constantly exploring how AR can best support our strategy.

    The inspiration phase of the purchase journey is becoming increasingly important for luxury customers. We are exploring how we can incorporate AR to enhance the inspiration agenda and create a unique experience. With the knowledge that younger luxury customers want to feel part of a community, we have been creating interactive experiences, which may be shared on social media. To celebrate the opening of our flagship store in Tokyo, Japan, in November 2019, visitors could take part in an exclusive AR experience. Activated using QR codes, the AR lens allowed users to locate hidden Burberry deer on the streets of Ginza and then share their discoveries on social media. In addition, in December 2019, Burberry launched a digital pop-up experience powered by Google Lens in London where users could see an aerial live feed of themselves on their phones, surrounded by a herd of Burberry deer.

    Using AR in commerce transforms the product discovery-and-search phase by blurring the lines between online shopping and the in-store experience. At the beginning of 2020, we launched an AR shopping tool through Google Search technology, which allows consumers to experience Burberry products embedded in the environment around them. When searching for Burberry items on Google Search on their phones, consumers can see an AR version of the product in their own physical space and evaluate the product at scale against other objects, allowing them to understand the sizing and details of an item. For example, a user can simulate the in-store experience by placing a TB Bag next to an existing outfit to gain a better understanding of the product before purchasing. This feature was trialled with Alibaba on Tmall in June 2019, where customers could virtually try on Burberry products. Burberry is one of the first luxury retailers to take advantage of this new tool from Google to bring AR technology to the online retail space.

    We are also using AR to share stories around our heritage. For instance, in March 2020, Burberry opened an immersive pop-up installation in Selfridges’ flagship creative retail space, The Corner Shop. The interactive pop-up celebrated Burberry’s links to exploration and recalled when the brand’s protective gabardine was favoured by polar pioneers. Penguins were brought to life via an AR experience by scanning various QR codes in and outside the store. The use of AR at the pop-up was a great conversation starter, which offered a storytelling opportunity for Sales Associates while customers interacted with the experience.

    Strategic Pillar: Digital

    THE LAUNCH OF BURBERRY’S OWN MESSAGING PLATFORM

    VIEW

    THE LAUNCH OF BURBERRY’S OWN MESSAGING PLATFORM

    R World, which was built in collaboration with Apple, gives Burberry Sales Associates access to product, brand and customer information all on the same mobile app. Following its successful launch in 2018, our digital team looked at ways to further enhance productivity in store. We know that our customers look for tailored and personalised experiences from luxury brands, so we launched R Message in September 2019. R Message is a direct messaging platform, which connects our in-store app R World with the customerfacing Burberry app. It adds a sense of bespoke service and a personal touch to online transactions by giving our in-store Sales Associates the power to chat directly with their customers, regardless of where they are in the world. They can also schedule appointments with customers or let them know about our latest product launches. The customer can also purchase items discussed in chats. R Message gives our Sales Associates an opportunity to further enhance service levels and create a seamless, bespoke, online retail experience for their top clients. The platform, which is available to UK customers by invitation only, has integrated mobile payment features, like Apple Pay.

    Strategic Pillar: Digital

    PREPARING FOR THE UK'S DEPARTURE FROM THE EUROPEAN UNION

    VIEW

    PREPARING FOR THE UK'S DEPARTURE FROM THE EUROPEAN UNION

    Authorised Economic Operator (AEO) status is an internationally recognised quality mark. This is awarded to businesses able to demonstrate their role in the international supply chain is secure and they exercise customs controls and procedures that meet UK and EU standards. AEO status gives quicker access to simplified customs procedures and the right to fast-track shipments through customs, safety and security procedures. Ahead of Britain leaving the European Union, we decided to work towards AEO accreditation to increase our operational efficiency and security.

    This required a substantial collaborative effort across the business, involving cross-functional cooperation and showcasing Burberry’s “one team” approach. All Burberry UK employees contributed to the preparation and audit process. This entailed developing, implementing and documenting changes to policies, procedures and ways of working across all our UK sites. All employees assumed responsibility for ensuring they had the relevant knowledge and were consistently demonstrating the activities and behaviours required to meet AEO standards. Our Companywide efforts resulted in Burberry becoming AEO accredited in February 2020.

    AEO accreditation increases our operational efficiency in delivering products to our customers, as well as moving our goods, samples and prototypes in and out of the UK. AEO status will also be an important operational management asset in light of the UK's departure from the EU.

    Strategic Pillar: Operational Excellence

    THE FUTURE OF SOCIAL RETAIL

    VIEW

    THE FUTURE OF SOCIAL RETAIL

    In November 2019, Burberry and Chinese technology company Tencent announced an exclusive partnership to develop social retail in China. This is a revolutionising concept blending social media and retail to create digital and physical spaces for engaged communities to interact, share and shop.

    In FY 2020/21, Burberry will open a pilot store powered by Tencent technology in Shenzhen, China’s technology hub. The space will provide experiences that will connect luxury customers’ social and online presence with their physical environments. Located in the new Shenzhen Bay MixC development, the store will act as a laboratory and a space to trial innovative concepts for potential roll-out to the rest of the Burberry network.

    China, with its high levels of social media usage among customers and prowess in the fields of innovation and technology, presents the perfect environment for this pioneering partnership.

    Strategic Pillar: Distribution

    OPERATIONAL EXCELLENCE IN A RAPIDLY CHANGING ENVIRONMENT

    VIEW

    OPERATIONAL EXCELLENCE IN A RAPIDLY CHANGING ENVIRONMENT

    In FY 2019/20, we continued to focus on improving our agility and efficiency to optimise our performance against the backdrop of a rapidly changing business environment.

    The levers we used to achieve this included, simplifying processes, driving procurement savings and enhancing technology to support the customer experience in store. We continued to improve our ways of working and we completed the deployment of our global standardised point-of-sale system. We also expanded our mobile client engagement tool, R World, to Sales Associates globally.

    Strategic Pillar: Operational Excellence

  • Product
  • Distribution
  • Digital
  • Communication
  • Inspired People
  • Operational Excellence
  • RUNWAY SHOWS

    VIEW

    RUNWAY SHOWS

    Product is at the heart of our strategy. We continue to invest in the highest quality materials and exquisite craftsmanship to ensure Burberry designs delight our customers season after season.

    Over FY 2019/20, our runway collections and new takes on our classic lines sparked excitement and renewed interest in the brand.

    Memories, our Autumn/ Winter 2020 collection, was inspired by Riccardo Tisci’s reflections on his formative years as a young designer, and is imbued with references to the places he visited, the people he met and the music he listened to at the start of his career.

    Meanwhile, Evolution, our Spring/Summer 2020 collection, featured Victorian-inspired silhouettes, combining innovative design techniques and fabrics with classic touches and nods to the brand’s heritage.

    Takes on Burberry's past were also evident in our accessories introduced in the year. The Supersized Pocket Bag, which was unveiled at our February show, is a modern twist on a design from our archive (see page 48 of the Annual Report), for instance. The Olympia bag collection, the Society holdall and a duffle bag in plaid were also shown at the February show.

    The creative force behind Burberry's transformation is being recognised externally. Riccardo Tisci was named 2019’s Fashion Innovator by the Wall Street Journal. Burberry has also consistently been listed in the top 10 hottest brands in the Lyst Index, reflecting our growing brand heat both on social media and online overall.

    While encouraging creativity to thrive, we also keep Burberry's Responsibility Agenda top of mind at all times. For instance, we ensured both of our 2020 runway shows were carbon neutral.

    In addition, on the day of our Autumn/Winter 2020 show in February 2020, we announced the creation of our Regeneration Fund, which is designed to support a portfolio of carbon insetting projects to tackle the environmental impact of our operations. The projects will enable us to store carbon at source and remove it from the atmosphere. Kick-starting the programme, Burberry has partnered with PUR Projet to design and implement regenerative agricultural practices with some of its wool producers in Australia. The project will work at farm level to improve carbon capture in soils, enhance watershed and soil health, reduce dryland salinity and promote biodiverse habitats.

    Strategic Pillar: Product

    INSPIRED BY THE BURBERRY ARCHIVE: THE POCKET BAG

    VIEW

    INSPIRED BY THE BURBERRY ARCHIVE: THE POCKET BAG

    Burberry's history continues to act as a rich source of inspiration for our brand. Our design team regularly explores the Burberry archive, allowing our heritage to be an influence on our new collections. For instance, the Pocket Bag, a key piece from our Spring/Summer 2020 campaign, was inspired by the Michelle, a Burberry bag sold between 1981 and 1990. Also known as the Michelle Shopper, the soft luggage-style bag featured leather details and the Burberry Check, one of our registered trademarks. The modern version has been updated with a distinctive front pocket, which inspired its moniker. The Pocket Bag exemplifies how our new collections celebrate our heritage.

    Strategic Pillar: Product

    TRENCH BESPOKE

    VIEW

    TRENCH BESPOKE

    Building on our brand’s heritage and our strong connection with our founder Thomas Burberry, we have continued to enhance our Trench Coat offering. This Burberry icon was given a fresh interpretation in FY 2019/20 with the launch of Trench Bespoke. Designed to be an elevated in-store experience, our customers have the option to order a Trench Coat to their specifications through a private consultation.

    Offering this service reasserts Burberry’s ownership of the trench category. Trench Bespoke drives a desire for a timeless and relevant icon among a new fashion audience.

    Strategic Pillar: Product

  • POP-UP SPACES

    VIEW

    POP-UP SPACES

    Pop-up stores, whether standalone doors or themed areas in store, provide an opportunity to connect with customers in immediate and surprising ways. They allow us to display new products and collections in creative ways to inspire the customer. As part of our FY 2019/20 marketing programme, we opened over 25 pop-ups in influential luxury fashion cities, including Dubai, Tokyo, Paris and London.

    To support our refreshed Thomas Burberry Monogram, we installed a series of themed spaces within our stores. These performed particularly well, with notable increases in sales and traffic in the stores hosting this type of activation.

    To showcase the inspiration behind the Spring/Summer 2020 collection, in February and March, we arranged takeovers of the windows and atrium at the Printemps department store in Paris and collaborated with Selfridges The Corner Shop in London. The pop-up at The Corner Shop was a custom-built space celebrating our rich history in discovery and exploration. Recalling an era when Burberry’s protective gabardine was favoured by polar pioneers, we created an abstract snowy landscape featuring silver mirrored cubes and expedition sleds with Burberry silk scarves for sails. The installation included model penguins, which were brought to life through an augmented reality (AR) experience.

    The penguins were a reference to famous pioneering polar explorers, such as Sir Ernest Shackleton, who wore Burberry while exploring the Antarctic at the beginning of the 20th century.

    Strategic Pillar: Distribution

    THE FUTURE OF SOCIAL RETAIL

    VIEW

    THE FUTURE OF SOCIAL RETAIL

    In November 2019, Burberry and Chinese technology company Tencent announced an exclusive partnership to develop social retail in China. This is a revolutionising concept blending social media and retail to create digital and physical spaces for engaged communities to interact, share and shop.

    In FY 2020/21, Burberry will open a pilot store powered by Tencent technology in Shenzhen, China’s technology hub. The space will provide experiences that will connect luxury customers’ social and online presence with their physical environments. Located in the new Shenzhen Bay MixC development, the store will act as a laboratory and a space to trial innovative concepts for potential roll-out to the rest of the Burberry network.

    China, with its high levels of social media usage among customers and prowess in the fields of innovation and technology, presents the perfect environment for this pioneering partnership.

    Strategic Pillar: Distribution

  • INTRODUCING GAMES

    VIEW

    INTRODUCING GAMES

    In October 2019, we launched our first online game, B Bounce. This brought the gaming experience to customers globally on Burberry.com. Gamification, which is the use of elements of game design in non-gaming contexts, is becoming a powerful source of real‑world inspiration for luxury costumers. It offers another opportunity for us to inspire and connect with the Burberry community online.

    In this engaging and playful experience, which was built in-house by our digital team, players raced a deer-shaped character to the moon using supercharged Thomas Burberry Monogram puffer jackets. Players competed for special B Bounce prizes, with winners awarded custom-made GIFs and virtual Burberry puffer jackets edited onto a digital picture of their choice. The first prize was a real jacket from the 2019 Burberry puffer collection.

    In the first three months, B Bounce was played 1.5 million times in 40 countries. Building on the success of the game, as part of our 2020 Lunar New Year campaign in January, we launched our second game, Ratberry.

    We have previously experimented with gaming in China, but B Bounce is our first playful extension into a format which allows us to entertain and connect with our new, younger customers around the world. Such activations offer an opportunity for our customers, who are living in increasingly gamified environments both online and offline, to join the Burberry community and explore our products in this way.

    Strategic Pillar: Digital

    AUGMENTED REALITY

    VIEW

    AUGMENTED REALITY

    In line with Burberry’s longstanding commitment to digital innovation, we are embracing Augmented Reality (AR) as a means of connecting, engaging and inspiring customers. Our creative team works in a "test and learn" manner, constantly exploring how AR can best support our strategy.

    The inspiration phase of the purchase journey is becoming increasingly important for luxury customers. We are exploring how we can incorporate AR to enhance the inspiration agenda and create a unique experience. With the knowledge that younger luxury customers want to feel part of a community, we have been creating interactive experiences, which may be shared on social media. To celebrate the opening of our flagship store in Tokyo, Japan, in November 2019, visitors could take part in an exclusive AR experience. Activated using QR codes, the AR lens allowed users to locate hidden Burberry deer on the streets of Ginza and then share their discoveries on social media. In addition, in December 2019, Burberry launched a digital pop-up experience powered by Google Lens in London where users could see an aerial live feed of themselves on their phones, surrounded by a herd of Burberry deer.

    Using AR in commerce transforms the product discovery-and-search phase by blurring the lines between online shopping and the in-store experience. At the beginning of 2020, we launched an AR shopping tool through Google Search technology, which allows consumers to experience Burberry products embedded in the environment around them. When searching for Burberry items on Google Search on their phones, consumers can see an AR version of the product in their own physical space and evaluate the product at scale against other objects, allowing them to understand the sizing and details of an item. For example, a user can simulate the in-store experience by placing a TB Bag next to an existing outfit to gain a better understanding of the product before purchasing. This feature was trialled with Alibaba on Tmall in June 2019, where customers could virtually try on Burberry products. Burberry is one of the first luxury retailers to take advantage of this new tool from Google to bring AR technology to the online retail space.

    We are also using AR to share stories around our heritage. For instance, in March 2020, Burberry opened an immersive pop-up installation in Selfridges’ flagship creative retail space, The Corner Shop. The interactive pop-up celebrated Burberry’s links to exploration and recalled when the brand’s protective gabardine was favoured by polar pioneers. Penguins were brought to life via an AR experience by scanning various QR codes in and outside the store. The use of AR at the pop-up was a great conversation starter, which offered a storytelling opportunity for Sales Associates while customers interacted with the experience.

    Strategic Pillar: Digital

    THE LAUNCH OF BURBERRY’S OWN MESSAGING PLATFORM

    VIEW

    THE LAUNCH OF BURBERRY’S OWN MESSAGING PLATFORM

    R World, which was built in collaboration with Apple, gives Burberry Sales Associates access to product, brand and customer information all on the same mobile app. Following its successful launch in 2018, our digital team looked at ways to further enhance productivity in store. We know that our customers look for tailored and personalised experiences from luxury brands, so we launched R Message in September 2019. R Message is a direct messaging platform, which connects our in-store app R World with the customerfacing Burberry app. It adds a sense of bespoke service and a personal touch to online transactions by giving our in-store Sales Associates the power to chat directly with their customers, regardless of where they are in the world. They can also schedule appointments with customers or let them know about our latest product launches. The customer can also purchase items discussed in chats. R Message gives our Sales Associates an opportunity to further enhance service levels and create a seamless, bespoke, online retail experience for their top clients. The platform, which is available to UK customers by invitation only, has integrated mobile payment features, like Apple Pay.

    Strategic Pillar: Digital

  • ADOPTING A LOCALISED CONTENT APPROACH

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    ADOPTING A LOCALISED CONTENT APPROACH

    During FY 2019/20, we continued to pursue a communications strategy incorporating marketspecific content and collaborations with local media partners to improve messaging relevance for consumers. For instance, to mark the launch of the Autumn/Winter 2019 campaign, we collaborated with Nowness (UK, US, China), Dazed (Korea) and Mille (UAE) to bring the brand to life with local audiences. In November 2019, to celebrate the opening of our new flagship store in Tokyo, we decorated local metro stations and streets with the limited-edition pistachio Thomas Burberry Monogram print.

    We chose Lunar New Year as an opportunity to connect with our Chinese consumers in a festive way. Brand ambassador Zhou Dongyu starred in a vivid red campaign alongside models He Cong and Liang Jiyuan. We also introduced the Ratberry game (read more on page 40 of the Annual Report) and published a WeChat content series exploring Lunar New Year customs and how young people today spend the traditional festive period. In a series of short videos, Ratberry interacted with a number of celebrities on the social platform Weibo. This activity contributed to increased brand heat across our priority social platforms.

    We have also increased investment in localised content to communicate in a more authentic and relevant way with our consumers. In August 2019, our campaign for the Qi Xi Jie festival in China (similar to Valentine’s Day) was one of our most successful campaigns to date, with over 200 million views.

    For our Thomas Burberry Monogram campaign, we devised our TB challenges, which encouraged viewers to make the shape of a T and B with their hands on Douyin and TikTok, generating over one billion views. This enabled us to connect with young consumers in a way that felt authentic to them. Burberry is the first luxury brand to stage a major campaign on TikTok.

    Strategic Pillar: Communication

  • DIVERSITY AND INCLUSION

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    DIVERSITY AND INCLUSION

    Burberry is an open and caring employer, which aims to offer our employees, representing almost 120 nationalities across 34 countries, an optimal working environment where they feel valued and appreciated. In November 2019, we launched an Internal Diversity and Inclusion Council. The 12 members of the council were recruited from throughout Burberry’s operations and are reflective of our employee population. The council, which will convene remotely four times per year, is tasked with acting as an internal sounding board for Burberry on matters pertaining to diversity and inclusion.

    In addition, an external Cultural Advisory Council was formed in December 2019 with the aim of gaining insight into our external environment from diverse perspectives.

    Comprising six experts from various fields, including academia and the arts, this council will convene remotely three times a year and its findings will be fed back to the Board. The Cultural Advisory Council will communicate with the Internal Diversity and Inclusion Council regularly to share insights and findings.

    We continue to focus on evolving strategies for recruiting and developing talent, which promote our cultural values and ensure diverse representation across the business. We are reviewing our human resources systems to ensure that additional infrastructure, which will simplify our processes, is considered in the future. As part of championing meaningful partnerships and bringing different perspectives to Burberry, we are developing multi-faceted programmes to mark key calendar moments. These programmes provide an opportunity to raise awareness around our commitments and further engage with our employees.

    One of these moments was International Women’s Day 2020. We held wideranging panel discussions and hosted young ambassadors from The Prince’s Trust Women Supporting Women initiative in the week preceding Sunday 8 March. Panellists included Burberry leaders from different areas of the business, as well as experts from other industries who provided external perspectives. The programme of three panel discussions touched on themes around the career journeys of different women at Burberry, how men can be advocates for change and the importance of intersectionality and identity. We saw strong participation in our International Women's Day panels, both online and in person. Video recordings of the discussions were also made available on our internal site, Burberry World. In addition, other regions celebrated International Women's Day with their own internal panel discussions and donation activities.

    The young ambassadors from The Prince’s Trust, many fashion entrepreneurs themselves and participants in Women Supporting Women programmes, got a chance to talk to the panellists after the sessions and went to the Regent Street flagship to learn more about Burberry as a brand.

    Later this year, we are launching our new diversity and inclusion strategy, which is aligned with our wellbeing strategy. We have already started rolling out digital training on unconscious bias for all employees.

    As of March 2020, the representation of women and men in the workplace is set out below:

    Total Number of Women Percentage of Women Number of Men Percentage of Men
    Executive Committee 11 3 27% 8 73%
    Leadership (Director and above) 329 174 53% 155 47%
    All workforce 10,161 6,755 66% 3,406 34%

    Strategic Pillar: Inspired People

    WELLBEING

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    WELLBEING

    We have continued advancing our Inspired People Agenda responding to feedback from our annual Employee Engagement Survey. In FY 2019/20, our employee engagement rose by 1% overall to 75%, with 87% of people proud to work at Burberry and 82% motivated to go above what is expected to make Burberry successful. We believe that wellbeing is the responsibility of the organisation, its leaders and each employee. In FY 2019/20, we focused on three key initiatives to improve employee wellbeing: mental health awareness, managing energy and providing employees with tools that empower them to manage their professional lives more effectively. We saw increased engagement around World Mental Health Day on 10 October 2019 as we encouraged teams to talk about their mental wellbeing. This sparked an increase of over 300% in traffic to our Employee Assistance Programme (EAP), while over 280 #OneChange posts appeared on our Burberry World internal intranet.

    Later in the year, we announced a new inclusive global parental leave policy, which provides a minimum of 18 weeks' paid leave to all new parents. In addition, as part of our phased return to work programme for new parents, colleagues are able to work four days per week while receiving full pay during a four-week period. The policy launched on 1 April 2020.

    Strategic Pillar: Inspired People

  • PREPARING FOR THE UK'S DEPARTURE FROM THE EUROPEAN UNION

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    PREPARING FOR THE UK'S DEPARTURE FROM THE EUROPEAN UNION

    Authorised Economic Operator (AEO) status is an internationally recognised quality mark. This is awarded to businesses able to demonstrate their role in the international supply chain is secure and they exercise customs controls and procedures that meet UK and EU standards. AEO status gives quicker access to simplified customs procedures and the right to fast-track shipments through customs, safety and security procedures. Ahead of Britain leaving the European Union, we decided to work towards AEO accreditation to increase our operational efficiency and security.

    This required a substantial collaborative effort across the business, involving cross-functional cooperation and showcasing Burberry’s “one team” approach. All Burberry UK employees contributed to the preparation and audit process. This entailed developing, implementing and documenting changes to policies, procedures and ways of working across all our UK sites. All employees assumed responsibility for ensuring they had the relevant knowledge and were consistently demonstrating the activities and behaviours required to meet AEO standards. Our Companywide efforts resulted in Burberry becoming AEO accredited in February 2020.

    AEO accreditation increases our operational efficiency in delivering products to our customers, as well as moving our goods, samples and prototypes in and out of the UK. AEO status will also be an important operational management asset in light of the UK's departure from the EU.

    Strategic Pillar: Operational Excellence

    OPERATIONAL EXCELLENCE IN A RAPIDLY CHANGING ENVIRONMENT

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    OPERATIONAL EXCELLENCE IN A RAPIDLY CHANGING ENVIRONMENT

    In FY 2019/20, we continued to focus on improving our agility and efficiency to optimise our performance against the backdrop of a rapidly changing business environment.

    The levers we used to achieve this included, simplifying processes, driving procurement savings and enhancing technology to support the customer experience in store. We continued to improve our ways of working and we completed the deployment of our global standardised point-of-sale system. We also expanded our mobile client engagement tool, R World, to Sales Associates globally.

    Strategic Pillar: Operational Excellence

RESPONSIBILITY PERFORMANCE

CREATING TOMORROW’S HERITAGE

Taking steps to protect our planet and ensure we have a positive impact on those in our supply chain and communities.

    • Goal: to have 100% of product with more than one positive attribute by 2022, where positive attributes relate to social and/or environmental improvements, achieved at either raw material sourcing or product manufacturing stage.
    • Progress: 89% of Burberry products had at least one positive attribute and 67% of products had more than one.
    • Goal: to procure 100% of our cotton* more sustainably by 2022 by using a portfolio approach. This includes working with partners such as the Better Cotton Initiative (BCI) and Textile Exchange, as well as exploring new sources, including organic and regenerative cotton.
    • Progress: 75% of cotton* procured more sustainably.
    • Goal: to source 100% of leather from tanneries with environmental, traceability and social compliance certifications by 2022.
    • Progress: 64% of our leather is sourced from suppliers with such certifications.

     

    * Where cotton is the product's main material.

    • Goal: to achieve a zero-carbon footprint in our own operational energy use by reducing absolute emissions, improving energy efficiency and switching to renewable energy sources, before offsetting any remaining emissions.
    • Progress: 86% reduction in market-based emissions since base year FY 2016/17.
    • Goal: as part of our RE100 commitments, we have committed to 100% renewable electricity by 2022 and are driving this through close collaboration with our procurement and retail teams and engagement with landlords.
    • Progress: we have achieved 90%^ renewable electricity across our global footprint.
    • Goal: reduce and revalue waste. We already reuse, repair, donate or recycle unsaleable products and we will continue to expand these efforts.
    • Progress: no destruction of unsaleable finished products. Zero waste to landfill in key UK and Italy operations^.

     

    ^ Please see the Creating Tomorrow’s Heritage page for more information on Burberry’s basis of reporting.

    • Goal: we aim to positively impact one million people by 2022.
    • Progress: 290,426^ people positively impacted in FY 2019/20 and 416,089^ since the start of the programme. Of this total, 184,000 people were positively impacted in the UK and US, 57,000 in Italy and 40,000 in Afghanistan in FY 2019/20.

     

    ^ Please see the Creating Tomorrow’s Heritage page for more information on Burberry’s basis of reporting.