How does a luxury brand approach the 21st century? One approach is to emphasise craftsmanship and aim for the top end of the market. This is the route preferred by Chanel and more famously by Hermes, whose iconic Kelly and Birkin handbags are still made by hand by skilled craftsmen.
The problem with the craftsmanship route is that it only works at the top end of the market because products created this way are, almost by definition, very expensive. Most luxury companies prefer efficient, more mechanised methods of production. Louis Vuitton, for instance, is among the world’s most profitable luxury brands, at least partly because of the efficiency of its manufacturing process.
But even when brands take the manufacturing route, they still like to emphasise the craftsmanship element. Last year, Vuitton got into trouble when two of its ads were banned in the UK by the Advertising Standards Authority. One of the ads featured a woman purporting to be a seamstress, hard at work, Hermes-style, at making Vuitton bags. It was a great ad but, as everybody in the fashion business knows, Vuitton’s production methods rely more on mechanisation than on traditional seamstresses. The ads had to be withdrawn from the UK.
Other brands take a multi-pronged approach. At Giorgio Armani, there is the expensive line (called ‘black label’ by aficionados) made from the finest fabrics. But there is also the relatively more affordable Collezione (‘white label’) line which is sold at department stores. Then there is Emporio Armani, directed at younger people. And there is A/X meant for those who want designer labels stuck on to Gap-style clothes. So, to say that you are wearing Armani can be a little misleading given the range of options and price levels within the umbrella brand.
But while these approaches are well-established and widely imitated in the luxury business, my guess is that a new 21st century model is emerging. And the pioneer is Burberry.
The brand itself is over a century and a half old. Burberry was the British company that invented the gabardine fabric that was turned into raincoats and mackintoshes. For decades, the Burberry trench coat has been a fashion classic, imitated by every designer, but still indelibly associated with Burberry.
But, as time went on, Burberry ceased to stand for very much more than that iconic trench. The company went through changes of ownership and its managers began licensing the name to manufacturers around the world. Almost all of Burberry’s menswear (which should have been the brand’s strength, given the iconic status of the trench) was licensed. The licensees followed no brand rules, often running their own ad campaigns, designing their own products and, in such countries as Spain, running Burberry’s local operations as an autonomous company.
Over a decade and a half ago, Rose Marie Bravo, a well-known American retail hotshot (she had run Saks Fifth Avenue), took charge of Burberry and turned its fortunes around, dragging the brand into the modern era and updating its image. During Bravo’s tenure, when fashion was still about easily identifiable brand signatures (the Vuitton monogram or the Gucci ‘G’ symbol, for instance), the check pattern that was traditionally used as the lining for the trench coats became Burberry’s own signature, turning up on everything from handbags to scarves to women’s wear.
At the time, Bravo’s work at Burberry was regarded as one of the fashion industry’s great success stories: an example of how a feisty American executive took a dying British company and turned it into a flourishing global brand.
This was a reasonable assessment. But Burberry’s success under Bravo was very much a product of its label-obsessed, conspicuously-consuming times. The check was quickly pirated (especially in Asia) and, perhaps, because there was very little in the way of brand personality to back the signature, Burberry became a symbol of flashy, but not very classy excess. In the class-conscious UK market (Burberry’s home), the check pattern became associated with ‘chavs’, a pejorative name for downmarket, vulgar buyers of flashy sportswear.
By the time Bravo stepped down, five years ago, she had turned Burberry into a global brand. But it was a brand whose future was uncertain.
Both Bravo, and Burberry designer Christopher Bailey, picked another American woman as the new head of Burberry. Angela Ahrendts (the name sounds European but she is from a small town in Indiana) was an experienced fashion industry executive (Donna Karan, Liz Claiborne, bra manufacturer Warnaco etc.) with little experience of the higher reaches of luxury. But Bailey, who had worked with Ahrendts at Donna Karan, pushed strongly for her, arguing that she would take the brand forward.
Last week, I drank a Diet Coke with Ahrendts at the Maurya in Delhi when she stopped by in India as part of a whistle-stop tour of the world. (She was off to Turkey the next day.) She recalled how Bravo had to persuade her to take the job and how, even before she joined, she had a very long lunch with Bailey at which they evolved the basic strategy for Burberry’s astonishing comeback.
They met in New York at Asiate at the top of the Mandarin Oriental, she remembered, and by the time they had left the restaurant they recognised what had to be done.
As we now know, it was a solution that worked brilliantly. Since Ahrendts joined in 2006, Burberry’s profits have surged. The company has trebled in value. It is now one of the world’s top five luxury firms.
What’s more, the financial success has been made possible by dramatic improvements in product quality, creativity and – most of all – brand image.
I asked Ahrendts if she was concerned about the ‘chav’ factor when she took the job. To my surprise, she denied that it had been a major worry: "It was just restricted to the UK market. They had to explain what the word meant to me. It was never a factor in America or the global market."
Her priorities then – which emerged out of that long lunch with Bailey at Asiate – were more practical. Much of Burberry’s menswear was still licensed. The brand was perceived as being a symbol of the get-rich-quick culture that prevailed in the early part of the century, and the creative component had been seriously underplayed.
Though nobody at Burberry will say so in so many words, my guess is that Ahrendts’ background, as somebody who understood marketing and the fashion business but was not steeped in the old rules of luxury branding, probably helped her evolve a new model for Burberry.
While the decision to end all licensing, though costly, was probably the obvious way to go forward, it is her other innovations that intrigued me. Five or six years ago, people who ran luxury brands believed in playing down the role of the designer and playing up the brand. (At the first HT Luxury Conference in Bombay, Robert Polet, then head of Gucci group, openly declared in his speech that it was a mistake to give too much prominence to individual designers.) Ahrendts went the opposite direction: she elevated Bailey to a position where no major creative decision (from the design of an office to the selection of a fragrance) could be taken without his go-ahead.
Then, she softened the hard edge of the brand. According to her, younger people today respect a brand that seems to care about more than just making money. So, she set up the Burberry Foundation to channel part of the company’s profits back into society.
Next, she decided that it was a mistake for luxury brands to ignore digital technology and social media. More than any other fashion brand, Burberry uses the digital route. Fashion shows are streamed live all over the world (sometimes in 3D). Launches are announced on Facebook (the new fragrance was pushed – extremely successfully – on Twitter and Facebook) and the Burberry site is a hive of activity, not just a platform to sing the company’s praises. For instance, it includes a section called Burberry Acoustic featuring performances by young British bands selected by Bailey.
Though this is not something that Burberry says itself, my theory is that Ahrendts turned it into one of the world’s top five luxury houses by making it a brand for our times: soft, caring, cool, relaxed ("dishevelled elegance" in Bailey’s description of the style) and contemporary. Of course there is the heritage (the trench is now a bigger part of Burberry’s collections than ever before) and the Britishness (she shifted the shows from Milan to London), but Burberry is no longer a brand that focuses too much on symbols (the check now features on less than 10 per cent of merchandise) or screams its presence. And there is some craftsmanship too: Burberry’s SS12 collection features hand stitching, beading etc.
Experience – and sales figures, certainly! – suggests that this is a model that works in this era. People have got over labels. They want elegance. They want softness. And they want coolness. The Burberry story offers a new model for luxury: away from obvious labels, prohibitively expensive craftsmanship or neatly defined high-priced and low priced sub-brands.
Will that formula work in India? Ahrendts thinks it will. Burberry is expanding quickly (a new store opened at the Gurgaon Oberoi during her visit) though it still lacks a clear image or identity in the Indian market.
That, says, Ahrendts, will be set right. Her Indian targets go beyond Bombay and Delhi, to the tier-two cities. That is where in future lies, she believes, not just in the big metropolitan markets.
So far at least, she has been right about everything. Let’s see if she is right about India.
From HT Brunch, October 23
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