Mega-Brands Will Step Away From Apparel: Sharma

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Nov. 14 (Bloomberg) –- Neev Capital Managing Director Rahul Sharma discusses what we can expect from Burberry in their first release since CEO Angela Ahrendts announced she was leaving the company to head Apple retail. He speaks with Anna Edwards and Mark Barton on Bloomberg Television’s “Countdown.” (Source: Bloomberg)

The latter.

As the first time we are singing the creative designers step up to the ceo role.

It's quite unusual in the luxury world.

Having said that, it's way too early because the focus will still be on the numbers.

Angela wanted to stay on for a recent number in they will keep the focus on the numbers.

, should the success of burberry, in the selling the close or developing value for shareholders, how much of the success is due to angela arens and how much for bailey?

Magic as they work together to create success and we see this out a lot of luxury brands.

Fact is you have a very good commercial person in charge of all of the commercial operations making sure you execute and someone with a creative vision and that is the key test here because chris bailey is going to have a lot on his plate.

He's going to have to stretch himself and expand into other roles that he was not doing.

Being the money man.

Where are they heading?

Steady as she goes until angela disappears?

Sanford bernstein says that they need to decide whether to go upscale to challenge the likes of product or to target the wider audience with less expensive goods.

Is that the choice that he has to make?

I think burberry has already made that choice to a large extent.

They try to make the brand accessible to certain product categories, like a beauty, a natural extension.

It allows some to reach out to the brand you cannot assist early afford the leather.

They are getting rid of some of the affordable items in clothing or other parts of the business.

They brought in makeup and could use that as their introductory level pricing type of product.

It is the younger millennial customer who sees it as an aspirational brand but if you look at the apparel or handbag offers, they have gone a long way away from what was particularly logo and the price points are much more elevated.

They are on their way there already and that is in the agenda, democratize through publicist a, awareness, but also through products like beauty but at the same time take it up?. is that the take away from the entire luxury goods industry?

The logo-type brands not doing so well but the ultra high-end is doing better?

Very much so and you see a huge divide where people like louis vuitton and gucci have struggled quite a bit in terms of rarely maintaining this growth where you actually have very strong performances continuing from more enduring really top-end brands like her mays and your -- hermes and dior.

The wealthy want something exclusive.

They want something new that someone else does not have.

As they said it's not all about the bling anymore which i thought was funny.

Tell us about what they're offering in a parallel the post of others in the luxury space.

I know you said before that some luxury brands had been moving away from apparel and into other areas to get better margins.

That's one of the key advantages behind burberry and ralph lorenz.

What you are seeing is a lot of debate brands are scared of apparel because it does not translate very well across the world and its far easier to send a handbag and sell the same one dan to address the fit which is different.

It hits in the way.

Is a lot more risk so you are seeing a lot of brands deemphasize that.

They are able to invest behind that and therefore bring a much egg or, broader offering behind that product.

Luxury apparel is not growing anywhere near as fast as accessories and you have to keep that in mind.

The space is crowded.

That is why they find it easier.

H&m has launched this digital mecca in times square with lady gaga cutting the ribbon.

It was not a digital ribbon.

How did they differentiate themselves in a hugely competitive market, the likes of new york, top shop, all growing in stature?

How does it stand out against the competition?

You were just talking about european brands.

It's not forget that there is a credible amount of choice and as almost everywhere generally being a sluggish market.

You have to catch trends very specifically.

It's giving them a lot of push but a really think this heavy push on technology tells us that h&m, relatively speaking, is a discount retailer but going to a younger consumer and almost on a demographic you need to appeal through newness and technology even at the lower end of the spectrum.

H&m sees the need to push out technology.

On the catwalk, you can prepend -- pretend to be there.

A lot of these ideas are coming right from the top end to a much lower end retailer.

It shows the aspirational value seeping through.

It will happen again and again.

They will continue to copy the top-end.

Especially if you want to appeal to the customer because they are very aware of everything now.

The internet has really democratized what has been going on and what's in their -- what's out there.

You want to grow aspirational he.

Thank you very much for joining us today, managing director.

Let's move on.

This text has been automatically generated. It may not be 100% accurate.


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