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TOKYO — Burberry Group plc chief executive officer Angela Ahrendts isn’t letting Japan’s challenging market conditions dampen her optimism about the brand’s prospects here — including a newly created joint venture to import handbags and other accessories.
This story first appeared in the January 27, 2009 issue of WWD. Subscribe Today.
“I know the luxury market is very soft in Japan, but we think it’s the perfect time to gain some market share,” Ahrendts told WWD last week after a series of meetings with department store managers in Tokyo. “Even though the overall market may become difficult, I think that retailers and customers are always open to a new innovative idea or a new exciting concept.”
To that end, Burberry has been busy making changes here. The company recently tapped Masaki Iwase as president of Burberry Japan, a newly created role. Iwase spent eight years at Gucci Japan, most recently as ceo.
His duties will include overseeing a new venture between the British company and its longtime licensees, Sanyo Shokai and Mitsui & Co., to import Burberry’s international range of luxury accessories to Japan. Until now, Burberry used a series of Japan-specific licenses to source accessories for this market.
Together, the companies plan to open five freestanding stores carrying apparel and accessories as well as 50 accessories-dedicated shop-in-shops and concessions over the next five years. The first new sales points are slated to open in spring 2010.
Ahrendts said the venture will capitalize on Sanyo’s department store relationships and Mitsui’s real estate and logistical expertise to “aggressively jump-start” the company’s business in areas like handbags, small leather goods, belts and scarves.
“[We aim to] launch all of our luxury non-apparel products now into the Japanese market, where historically we’ve never been a player,” said Ahrendts, who said Burberry’s growing accessories sales in areas like South Korea, Hong Kong and Mainland China propelled a 33 percent jump in third-quarter sales in Asia.
Although Japan is limping through a recession — unlike much of the rest of Asia — Ahrendts said she continues to see untapped potential here.
“I don’t know if [the Japanese market has] hit bottom. I don’t know exactly when it will turn around and I’m trying not to stay focused on that. I’m trying to look at what the opportunities are — even during a down time,” she said.
In particular, Ahrendts noted the continued strength of the brand’s Japan-only diffusion lines. Women’s brand Burberry Blue Label and its men’s counterpart, Burberry Black Label, target a younger and more price-conscious consumer than the company’s other lines. Both collections are produced by Sanyo, although Burberry creative director Christopher Bailey exercises product approval and oversees the advertising campaigns.
“We had a tough December — I think like everyone else did here — but those businesses are less impacted than some of our more classic businesses,” Ahrendts said.
Speaking of Burberry’s Japan business in more general terms, the executive said the British company has a Japanese apparel market share of 2.7 percent. She also noted the country represents a “very large part of the company’s profit.”
Elsewhere in Asia, Burberry is gearing up to open flagships in Singapore and Beijing this spring. Ahrendts said the company plans to ride out the global economic crisis by focusing on key cities around the world.
“They won’t feel the recession, we think, as much as a lot of the outlying cities will,” she said.