Big Plans for Burberry

Burberry is poised to ramp up its retail presence in the U.S., boost its accessories business and leverage its brand name worldwide.

"Our brand recognition there is huge, and the economics work for us. If we go into a mall, for example, the landlord offers to pay for 50 percent of our fit-out costs," she said.

There are 36 Burberry retail units in the U.S., and Cartwright said that number easily could jump to 50 in the short term and "quite a lot higher" in the future.

Burberry plans to pump up retail space this year by at least 10 percent, mostly in the U.S. and Asia, which Ahrendts has identified as another high-growth market. She pointed to China, where there are already 35 Burberry stores, and said there was still potential there.

Ahrendts said Burberry increasingly would be "acting like a retailer," rejiggering the flow of goods into its stores to suit consumers' needs and thinking like a final customer rather than a wholesaler. To wit, the Prorsum line, which shows on the Milan runway, now will have eight in-store drops a year rather than three.

Ahrendts was quick to add, however, that wholesale sales remained a "critical and vital" part of the business.

Cartwright said that, thanks to Project Atlas, the $94 million IT overhaul program, Burberry within the next six months will have up-to-the-minute data on global sales and stock metrics. "We will be able to measure sales performance on a global basis," she said.

Accessories are another major source of growth. They currently generate 25 percent of sales, and the plan is to take them to 35 to 40 percent in the short term.

"We will aggressively invest to build our nonapparel business. There is a tremendous opportunity for handbags and small leather goods," said Ahrendts. Bailey added that Burberry has only scratched the surface in accessories. "We'll be increasingly experimenting and using the Prorsum runway as our laboratory," he said.

For spring 2007, espadrilles come with five different heels, there are five new sneaker styles and a variety of unisex bags.

"We found that half of all our men's bags are being sold to women," Ahrendts said, adding that Burberry recently created its first "all accessories" mailer, which will go out to customers later this summer.

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