Photographer: Simon Dawson/Bloomberg

It’s the Return of Checks for Burberry

  • CEO Gobbetti ‘very confident’ in leather goods development
  • Camel check makes comeback as U.K. brand brings in fresh blood

U.K. fashion company Burberry Group Plc is betting on growth in its smaller handbag business and playing up its trademark check as new Chief Executive Officer Marco Gobbetti seeks to join the luxury industry’s turnaround.

Marco Gobbetti

Photographer: Victor Boyko/Getty Images

At its first major runway show since Gobbetti took over in July, the trenchcoat maker showed off reversible tote bags decked out in its tartan plaid, including a 1,490 pound ($2,025) version lined in honey calfskin.

“We have already established a very good platform in accessories and leather goods, but I think we have a great opportunity there,” Gobbetti said in one of his first interviews since joining Burberry from French rival LVMH’s Celine. “I’m very confident that will be a big area of development for us.”

In placing a priority on handbags, Gobbetti is borrowing from the strategy of LVMH’s Louis Vuitton and Hermes International, which generate much of their profit from leather goods and are bouncing back from a multiyear slump in Asia. The new CEO’s comments signal he’ll seek growth from an accessories business that generated sales of 1 billion pounds in the past fiscal year, or 38 percent of Burberry’s total.

While Burberry’s latest quarterly results showed signs of strength in China, the brand is seeking some panache after cutting its accessibly priced Brit and London lines as well as pulling out of many U.S. department stores whose heavy discounting held back its luxury aspirations.

Gobbetti took over the CEO role from Christopher Bailey, who has stayed on as creative director. To bolster creativity and luxury know-how, Burberry has also added two former Christian Dior executives -- Judy Collinson as merchandising chief and Sabrina Bonesi as handbag designer.

Fashion Week

The London Fashion Week show on Saturday gave the first hints of Burberry’s new creative direction as Bailey integrates the recent hires into his team. The new tote bags, trenchcoats and baseball caps featured prominent displays of the brand’s camel check. Bailey previously reined in use of the pattern during his 15 years at the company after it was embraced as an emblem of British street culture, tarnishing its exclusivity.

The Burberry fashion show on Sept. 16.

Photographer: Victor Virgile/Gamma-Rapho via Getty Images

Gobbetti emphasized that Burberry will remain an apparel and outerwear brand, but said there were many more accessories in the pipeline. Other categories with a high potential for expansion include footwear, he said.

“The design teams are excited, as you can see,” Gobbetti said. “There’s a lot of novelty.”  

Chief Financial Officer Julie Brown said the company is making progress in its effort to sell more items at its own stores, at a higher price, rather than via other outlets. Retail now makes up 78 percent of worldwide revenue, up from half a decade ago, she said.

“It’s all about elevating the Burberry brand,” Brown said.

Burberry has long had a more luxurious image in Asia than in the U.S., making it difficult to focus its offer. But Gobbetti said that even if different regions pose different strategic challenges, the brand remains strong worldwide.

“From that we can build a lot,” he said.

— With assistance by Francine Lacqua

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