Challenges Continue Burberry Three Solutions To Solve The Dilemma

In October 15th, Burberry released its mid term earnings report. According to the results, Burberry's total revenue amounted to 1 billion 105 million in the first half of September 30th, slightly higher than 1 billion 100 million in the same period last year, but it did not meet the analyst's forecast of 1 billion 160 million pounds, of which retail business's total revenue was 774 million, although it was 3.8% higher than the same period last year, but far less than the 818 million target of analysts.

The US and the Asia Pacific region, excluding Japan, still make Burberry headache. The former has only a single digit increase due to the decline in domestic consumers' purchase intention, while the latter is due to Hongkong luxury.

The difficult situation is showing a year-on-year downward trend of 2.1%.

However, thanks to a steady stream of tourists, European retail sales achieved a two digit growth. Despite the poor sales in the Asia Pacific region, the Burberry reported many outstanding performances in the Japanese market in its earnings. Through the addition of 6 new stores and expansion of children's clothing in Tokyo and other places, Burberry's sales in Japan increased by 50%.

In order to enhance profitability, Burberry is also actively expanding the retail channels for cosmetics. Apart from promoting cooperation with the world's cosmetics retailing platform, the Japanese market, which has a good market performance, Burberry announced in March this year that it would hand over the Japanese distribution rights of its perfume business to the Japanese cosmetic brand Shiseido, and announced that it would also cooperate with the development of high-end skin care products and make-up series.

Staff including CEO included a pay reduction of 30 million pounds.

However, the hot sale of Burberry in Japan still can not make up for its low performance in the Chinese market. Its income in Japan is only 2%, but in mainland China and Hongkong, this figure can reach 30%. With the promotion of external factors such as the depreciation of RMB and anti-corruption, and the rational return of Chinese consumers to luxury consumption, Burberry's sales in the Asia Pacific region will continue to retrogress.

The poor performance of the current situation also plagued Burberry.

People.

Just as the mid term earnings report was released, Burberry group CFO Carol Fairweathe announced in a conference call on Thursday that the company will make a 30 million pay reduction plan for all employees including CEO Christopher Bailey.

In the past year, Christopher Bailey, who was very proud of it, just got a raise, earning 7 million 500 thousand pounds a year.

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"In the first half of this year, some key markets in our country have had an impact on consumer demand due to changes in the external environment. In order to cope with this situation, we will focus on promoting sales and productivity and increasing resilience to disposable costs."

Burberry CEO and creative director Christopher Bailey said in a public statement.

Various attempts to integrate technology will continue.

Bailey also stressed in the statement that the upcoming third quarters of the various festivals will become a critical period for Burberry to turn around. The company has already prepared online, downgrading and other sales channels. For Burberry, who is especially good at digital marketing among the major luxury brands, promoting sales through social media cooperation can indeed play a "booster" for the sluggish Burberry.

Burberry is also doing this.

In the just concluded London

Burberry used the social software Snapchat to broadcast its new spring and summer products conference. Last month, Burberry became the first luxury brand to set up self built channel on Apple music. All these actions indicate that Burberry is trying to attract younger generation of Western consumers to establish long-term market concerns and gradually reduce their dependence on the Chinese market.

"It's not hard to understand why Burberry is going to switch to western consumer groups again. We need to know that in France, Spain, Italy and other places, the sales volume of Burberry can exceed 20%."

Lianna Brinded, a columnist for business blog Businessinsider, talks about it.