Burberry hopes Brit brand can win over shoppers worldwide

Fashion chain trades on its Britishness to capture growing far eastern market

The music is pounding, the champagne is flowing and a pimped-up pomeranian in a bejewelled jacket has just snaffled a mini-burger off the plate of a passing waiter.

Benedict Cumberbatch and Ellie Goulding are among the celebrities fighting for air in the sweaty throng of impossibly beautiful Burberry models, including rock offspring Tali Lennox and Tara Ferry, who are among the faces in its latest campaign. One-time EastEnders actor Daniella Westbrook, who nearly did for the brand when she was snapped head to toe in Burberry check, is nowhere to be seen.

The party is the latest step in the continuing reinvention of the company started by Thomas Burberry, a 21-year-old draper's apprentice, in Basingstoke in 1856. In the last decade the business has climbed out of the hole dug by its former reliance on trenchcoats and that trademark check. Its upmarket label Prorsum regularly attract A-list stars such as Sarah Jessica Parker and Gwyneth Paltrow to the front row of its fashion show and investors are happy too. Since the start of last year the share price has more than doubled to £13.63, making the business worth nearly £6bn – about the same as Marks & Spencer – and one of the FTSE 100's best performing stocks. Not bad for a company that was once an unloved part of GUS, a now defunct conglomerate that also owned Argos.

The chi-chi store in the heart of London's Covent Garden is the first in Europe dedicated to the casual "Burberry Brit" fashion label, which it hopes will provide another string to its bow as it looks to broaden its appeal and attract younger shoppers.

With a glitzy new head office in London's Victoria under the watchful eye of its American chief executive Angela Ahrendts, the brand is increasingly using its Britishness as currency in a luxury market dominated by big continental European brands such as Louis Vuitton and Gucci, but increasingly looking to the far east for sales.

"We are selling Britishness around the world," said Ahrendts recently. "All the music we use is British, all the models are British, the design team is 80% from British design schools like St Martins."

Burberry's amiable creative director Christopher Bailey, who hosted Thursday night's party, described Brit as "a little bit dishevelled and distinctively British".

But China is the big prize for the luxury goods industry: it is on track to become the biggest single luxury market by 2015. In recognition of that potential, Burberry bought out its longstanding Chinese business partner for £70m last year. It recently opened a store in Beijing and plans to expand from 60 to 100 shops. Even away from home the Chinese are a shopping force to be reckoned with, and Burberry is hiring Mandarin speakers in the UK to ensure sales are not lost in translation.

Covent Garden itself is in the middle of a multimillion-pound makeover, as it looks to shake off its reputation as a tourist trap and become a shopping destination for luxury and cult brands. The location is a bold choice for Burberry and right next door to what is the largest Apple store in the world.

The morning after the party there is no evidence of spilled drinks on Burberry's pristine shop floor, but unlike next door – where several hundred people are queuing up to buy an iPhone 4 – customers are thin on the ground.

The trendy collection includes what looks like a red plastic raincoat on sale for more than £400 and a range of neon "jelly" shoes costing more than £100 a pair. But there are also safer options like chic cargo pants and field jackets in neutral colours. After ducking into the store quickly, a wide-eyed would-be shopper admits she "loved" the short trenchcoat in the window – but swiftly retreated after turning over the price tag. Two trendy friends visiting from Hong Kong are divided: one complains that Burberry is the same every season and that she prefers Fred Perry, but her friend confesses to lusting after a trenchcoat.

Ahrendts knows attracting young, aspirational shoppers to the brand is vital, and has launched several micro-websites, including Art of the Trench, to "build a community" around a brand which now has more than a million "friends" on Facebook. She is also an advocate of harnessing technology and last autumn streamed its catwalk show to sites around the world in 3D. The Covent Garden store has giant touch screens that allow shoppers to flick through lifesize images of its products which shop assistants, armed with iPads, can then order for them.

At its nadir Burberry was a licensing shell. Regaining control of the brand by buying out licence-holders, as well as moving into new areas such as accessories, menswear and childrenswear, has been a long haul started by Ahrendts's predecessor Rose Marie Bravo. On Bravo's watch the brand stuttered when the check was hijacked by B-list celebrities and became a must-have for football fans. But the new less-is-more policy has worked – the check now appears on only about 10% of products.

Lorna Hall, senior retail analyst at trend forecaster WGSN, says Burberry has the potential to be a "British Ralph Lauren" in terms of revenues and scale. Polo Ralph Lauren had sales of $5bn (£3.1bn) last year, compared with Burberry's £1.3bn. "Burberry's eyes are on that prize and Brit is a stepping stone towards that."


It's official: "Luxury shame is now over," according to the US consultancy Bain & Co. After a two-year hiatus caused by the financial crisis, demand for designer handbags, watches and champagne is likely to hit new highs this year, with Bain predicting sales will jump 8% to hit €185bn (£160bn) in 2011. Spooked by turbulent financial markets, falling consumer confidence saw the luxury goods sector contract by €17bn in 2008 and 2009. Bain said sales recovered to pre-crisis levels in 2010, rebounding 12% to €172bn powered by China, where sales leapt 30%. China is predicted to become the world's biggest luxury goods consumer by 2016. When purchases made by Chinese tourists abroad are taken into account it is already number two behind the US.


Zoe Wood

The GuardianTramp

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