LONDON — Burberry is scaling new heights, with sales returning to their pre-pandemic growth rates, a slick store concept rolling out in Knightsbridge and a new, younger generation of shoppers snapping up sneakers, the Olympia bag and TB monogram swimwear.
Burberry has also been behaving more like a luxury brand, due to a strategy set in motion by the outgoing chief executive officer Marco Gobbetti, who has culled the wholesale client list, put the focus on full-price sales, done away with markdowns and taken ownership of the leather goods business.
This week, he’ll mark another milestone — the opening of a store at 1 Sloane Street between Harrods and Harvey Nichols that’s part of a new development by The Knightsbridge Estate. Burberry has nabbed the key corner site overlooking Brompton Road and Sloane Street, and is the first tenant to occupy one of seven planned flagship stores.
Gobbetti worked with Burberry’s chief creative officer Riccardo Tisci and the eminent Italian architect Vincenzo De Cotiis on the concept that the CEO described as a timeless — and definitely not trendy — space.
“I didn’t want this to be a fleeting moment,” Gobbetti said in an exclusive interview ahead of the store’s official opening this week. “This is a brand with an incredible heritage, based on items, products, icons — not trends. The store had to be fresh, modern, relevant but it also had to have a timeless attitude.” He said all the house codes are there, “but I don’t think there is anything that’s in your face.”
The space, which spans 9,225 square feet over three floors, is different from every other Burberry store, and particularly the beige-and-check temple that was once located right across the street in the early Aughts.
The new space is bright and spare with lots of tall, arched windows; a network of slim metal rails on the floors and ceilings, some of them configured in an abstract check pattern; black-and-white checkerboard floors, and lots of mirrors reflecting the light pouring in from the street.
Near the entrance is a large space surrounded by metal rails, which is dedicated to seasonal displays. It features a selection of Burberry’s Olympia bags surrounded by large white plaster cast statues of Greek goddesses.
“We wanted to design this space like a portrait; stumbling through [Burberry’s] past and analyzing its present to interpret a future composed of reassuring details, and unexpected perspectives,” De Cotiis said of the approach.
Three similar stores will open later this year, at Shanghai’s Plaza 66; in Paris on Rue Saint-Honoré, and on Bond Street in London. By the end of the year, the brand will have refurbished roughly 55 stores, or half of its worldwide store estate.
The timing couldn’t be better: Burberry has unlocked the bulk of its stores following a grueling series of lockdowns worldwide, and retail sales are on the rise.
On Friday, Burberry said first-quarter retail revenue surged 86 percent to 479 million pounds, fueled by continued strong growth in mainland China, South Korea and the Americas.
At constant exchange, retail revenue rose 98 percent in the three months to June 2, and beat analysts’ projections of 441 million pounds.
Comparable-store sales climbed 90 percent compared with the first quarter of last year, and rose 1 percent compared with pre-pandemic levels two years ago.
Burberry, which has been on a mission to eliminate discounting and shrink its sales periods, said that full-price comparable store sales jumped 121 percent compared with last year, and 26 percent compared to pre-pandemic levels.
There is no doubt that Gobbetti, who took up his CEO role in July 2017, and who navigated the brand through the rough seas of Brexit and COVID-19, is watching his vision for Burberry come to life.
So why is he leaving, and seemingly so suddenly?
“Today’s results, and last quarter’s results, show that we’ve completed a very important first phase of the transformation of Burberry,” Gobbetti said.
If there was ever a good time to leave he said, it’s now. “The team has an incredible energy to drive this forward, and I am sure that whoever will follow me will bring an even stronger energy, and write another success story for the brand.”
Asked how close Burberry has come to competing with the French-owned luxury giants — one of the goals Gobbetti set out when he took over as CEO — he said: “I definitely think we’re on the path. I think there’s a lot of work to do, but we’re going in the right direction. The whole offer has been elevated. Structurally, I think the brand can really compete now.”
Gobbetti will remain at Burberry until the end of 2021, and the company is currently looking for his successor.
As reported, Gobbetti is returning to his native Italy, and has been named CEO of the much smaller Salvatore Ferragamo. His job will be to rejuvenate that company on a number of levels.
Gobbetti said he’s looking forward to living in Italy again.
“I have not lived a large part of my adult life in Italy — I’ve been mostly abroad, in America first, and then in France and then the U.K.,” said Gobbetti, who has an undergraduate degree from American University in Washington, D.C., and a master’s degree in management from Thunderbird School of Global Management in Phoenix, Ariz.
Early in his career, he served as CEO of Moschino, and later spent 13 years at LVMH Moët Hennessy Louis Vuitton, where he was head of Givenchy — and recruited Tisci as the designer. Gobbetti later decamped to Celine, where he worked with Phoebe Philo, who is now starting her own business with LVMH as the minority shareholder.
“I have family that I’ve not been close with for a while now,” he said. “Also, I think I want to try, at least, to contribute to an Italian brand, to support what has been a tragic experience for Italy, as well as for the U.K.,” due to COVID-19.
“There is a strong desire in Italy to just pull the energy together and make this a new start for the country. I’m not at all thinking I’ll give a big contribution, but I like the idea of doing it,” he added.
Asked whether his exit would precipitate Tisci’s own departure, he said it would not. “We have a very good relationship, but we can live without each other,” Gobbetti said with a smile.
“Riccardo has matured and has become a great designer, a great creative director. He’s really pleased with where he is in the journey, the work that he’s doing for Burberry, and how he has been capable of interpreting the brand. I think he’s in a very good place. We kept a very good relationship even when I left Givenchy, and he stayed on.”
Indeed, Tisci remained at Givenchy for nearly a decade after Gobbetti left.
Tisci hasn’t commented publicly on Gobbetti’s move, although Burberry said Friday that he remains excited about the opportunities, and the chance put his personal imprint on Burberry. “We are very confident of Riccardo’s position,” said Julie Brown, Burberry’s chief financial and chief operating officer, in the first-quarter results call on Friday.
Having spent decades in the luxury business, Gobbetti said that during his tenure at Burberry, he’s been struck by the “generational change” that’s been happening, with younger customers — in the U.S. in particular — becoming attached to brands, and engaging with them like never before.
“I think what we’ve been seeing over the past year or two, since the pandemic, is all of these new, young boys and girls around the country — and not just New York and Los Angeles — but from everywhere, being interested and keen on learning, on wearing, on being part of the brands.
“Somehow the brands have become a part of who they are, they help them to express their personalities. There are lots of cross-cultural connections between music, art, film, fashion and luxury, and somehow these are the references that are important to the new generation,” he said.
Gobbetti added that social media has also allowed people to participate actively in the conversation with the brands.
“I find it fascinating — five or seven years ago, it was much more limited. The audience for fashion and for luxury was not as wide as it has become today. The big change is how fashion and luxury have permeated society.”
He said that at the start of his career, fashion and luxury was for the wealthy few. “Now, it’s accessible for everyone, and that is the big change.”
Brands, too, have changed in response to the new consumer, he said. They are now asking themselves how they can carry their values through to the consumer, how they can relate to broader society. Gobbetti believes that kind of social consciousness is now part of the DNA of luxury brands such as Burberry.
The company has experienced these changes firsthand.
The Burberry Foundation has been working with youth charities, food banks and related organizations for years. Last fall, it partnered with Marcus Rashford, the lead striker for Manchester United and a member of the English national football team, who campaigns against child food poverty.
Burberry and Rashford worked together to help charities that support young people in the U.K. and across the world. Rashford also appeared in a Burberry campaign that was photographed by Rafael Pavarotti and styled by Ibrahim Kamara. The Rashford-related posts turned into gold dust for Burberry, attracting record-breaking engagement with the brand.
Gobbetti is remarkably humble and self-aware about his work with Burberry, particularly over the past two years. He helped to prepare the company for a post-Brexit future — an expensive and time-consuming task — and then was forced to figure out, almost overnight, how to handle the COVID-19 crisis.
Burberry was also one of the first — and few — private sector bodies to put its money behind vaccine research, an investment that would result in the Oxford AstraZeneca jab. The company was also among the first to supply PPE to hospitals, turning its Yorkshire trenchcoat factories into National Health Service suppliers.
Last September, the company won a 573,000-pound contract to make gowns and personal protective equipment for the U.K. National Health Service. The agreement with the government was in addition to the 160,000-plus pieces of PPE that Burberry manufactured at its trenchcoat factory in Castleford, Yorkshire, and donated to the NHS and health care charities.
During the crisis, Burberry also refused the British government’s furlough money, and slashed manager’s salaries, although it did lay off 5 percent of the workforce last year, due to the impact of the pandemic.
Through it all, the team continued to produce and show collections and Gobbetti stuck to his strategy of elevating the brand.
As markets — and China in particular — began opening up, Burberry staged pop-up events, and put the focus on digital marketing and sales. It also cut the ribbon on a new concept store with Tencent in Shanghai last year.
“We are adaptable animals. We adapt to change,” Gobbetti said. “There is always something that will come your way, and you just have to be really agile, mindful of creating foundations that will carry you forward, and conscious of what’s around you. The pandemic has made us more considerate about the people around us, and who needs help most.”
He also believes the pandemic has been a great accelerator of luxury, and believes there is “pace, urgency and velocity” like never before in the business. In the old days, he said, “traditional luxury was kind of static — now, it’s no time to stay still.”