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Annual Report 2017/18

“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.”

Marco Gobbetti, Chief Executive Officer

Financial Highlights

Brand Highlights

We are a 162-year-old global luxury brand with a distinctive British identity.


Our Strategy

Our strategy will be delivered through six strategic pillars, four revenue drivers to re-energise the brand and enhance luxury consumer engagement (Communication, Product, Distribution and Digital) and two enablers (Operational Excellence and Inspired People). These will ensure that we continue to focus on productivity and simplification and have the right capabilities in place to realise our vision. 

product

PRODUCT IS AT THE HEART OF OUR TRANSFORMATION

To re-energise the brand and win with fashion-forward influencers, we are evolving our product offer to signal change and win the attention of luxury consumers. Transforming leather goods will be a key part of this. We will continue to be unconstrained by the traditional calendar, delivering regular newness. We will also focus on creating full outfits for the customer and re-energising all price points to recruit new customers to the brand.

The five components of our product strategy are:

  • Create a new, strong, fashionable product offer
  • Transform leather goods
  • Continuous engagement
  • Outfit
  • Rebalance price architecture

COMMUNICATION

EVOLVING OUR COMMUNICATIONS

We are evolving our communications to be led by product and made for social media. Placing our products at the centre of our communications, we will leverage our digital and social media reach to convey new energy. We will reignite brand heat and change customer perception, using bold consumer engagement, reinventing editorial content and increasing our focus on experiences, using pop-ups and capsules to continually engage consumers with the brand.

DISTRIBUTION

TRANSFORMING THE  CUSTOMER EXPERIENCE 

Our aim is to operate a distribution network that is consistent with our luxury positioning. To support this change, we will rationalise our non-luxury wholesale and retail doors, with an initial emphasis on the US and then EMEIA. We will also transform our in-store experience by refurbishing our retail stores and enhancing customer service. Together, these actions will enhance our luxury distribution network, supporting our refined brand positioning.

DIGITAL

REVOLUTIONISING CONTENT AND SERVICES

We are revolutionising our digital proposition by displaying highly curated product assortments and personalised stories and editorialising our website to enhance consumer engagement. We are also improving the omnichannel experience to allow customers flexibility over payment and delivery options, allowing them to switch seamlessly between physical and digital. We will also strategically grow and strengthen digital partnerships with brand-appropriate partners.

OPERATIONAL EXCELLENCE

FUTURE PROOFING FOR THE NEXT PHASE OF THE JOURNEY

To deliver sustainable growth, we must increase our agility and efficiency, enabling us to better respond to the rapidly changing environment in which we operate. Our ambition is to adapt our supply chain to deliver true luxury products, power the organisation through technology and to work in a simple and efficient way. Operational excellence is an important foundation as we strengthen our Company and re-position our brand.

By working differently and more effectively we can remove significant waste. As a result, we have accelerated and extended our cost saving programme to deliver £100m of cumulative cost savings in FY 2018/19, and £120m of cumulative annualised cost savings by FY 2019/20, which in total represents 15% of our addressable cost base. 

INSPIRED PEOPLE

DELIVERING THE ORGANISATIONAL AND PEOPLE ELEMENTS OF OUR STRATEGY 

Our Inspired People programme is designed to deliver the organisational and people elements of our strategy. Work is underway to deliver on our commitments of fostering a dynamic and inclusive culture to engage employees, empower our leaders, strengthen capabilities, expand our talent plans, simplify how we work and drive positive sustainable change across every part of our footprint.

The People plan is founded on five initiatives:

  • Culture and engagement
  • Talent and capabilities
  • Leadership
  • Ways of working
  • Responsibility


RESPONSIBILITY

Leather

PRODUCT

DRIVING POSITIVE CHANGE THROUGH ALL OUR PRODUCTS
We create products using the highest-quality materials and involving many manufacturing communities from across the world. As part of our new responsibility strategy, we are committed to ensuring that all our products have more than one positive attribute by 2022. 

Cashmere

COMPANY

BECOMING CARBON NEUTRAL AND REVALUING WASTE
In addition to driving environmental improvements in the supply chain, we are committed to addressing climate change impacts from our own operations, including offices, stores, manufacturing and distribution sites.

Volunteering

COMMUNITIES

POSITIVELY IMPACTING ONE MILLION PEOPLE
We have a long history of investing in the communities in which we operate, enabling employees to dedicate up to three working days a year to support their local communities and donating each year 1% of adjusted Group profit before tax to charitable causes. These range from supporting disaster relief efforts, for example the London Grenfell fire, South Asia Floods, hurricanes Harvey and Irma and the Mexico earthquake, to nurturing emerging talent through scholarships at the Royal College of Art, with a significant proportion going to the Burberry Foundation. We aim to achieve our one million goal mainly by supporting Burberry Foundation-led community programmes and, during FY 2017/18, have helped to positively impact 23,000^ people.