Burberry could face uncertain future

Burberry has recently reported positive financial, however the fall in sterling and influx of shoppers snapping up trenches and accessories was only a short term win. Already the company is forecasting a 30 million pound exchange rate problem for 2017.

But the biggest issue is perhaps the brand and its collections, which despite upbeat descriptives in its press release like “greater visibility of fashion and newness,” or “evolving our handbag offering” and “a new shape strategy,” the industry is anxiously awaiting the arriving of Burberry’s new CEO Marco Gobbetti in July, who will takeover from Christopher Bailey.

The Business of Fashion even went as far to say the company may be stagnating under the creative helm of Bailey, who will remain the chief creative office under its latest restructuring. Real newness in the business hasn’t happened for some time.

Burberry said it had reduced its product offer by 15-20 percent to re-focus its offering. It also said that it saw a “positive customer response to direct-to-consumer runway collections and their commercial extensions.”

Sales are leveling out, too. China saw comp sales flat although it noted an improved performance in the second half of last year. Mainland China delivered some growth, but not in line with previous years.

According to Bloomberg, Burberry is on track to achieve at least 100 million pounds of annual cost savings by 2019. “All this is a comfort for investors, because there’s little to console them elsewhere. The company still has a mountain to climb to make itself a millennial must-have.”

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