Burberry Group plc: history, ownership, mission, how it works & makes money

A Brief History of Burberry Group plc

Founded in 1856 by Thomas Burberry, Burberry Group plc has established itself as a leading global British luxury fashion brand. Initially specializing in outdoor attire, the company introduced gabardine, a waterproof fabric, in 1879, which became the foundation of its outerwear collections. The iconic trench coat was developed around World War I, solidifying Burberry's reputation for high-quality, functional fashion.

By the early 20th century, Burberry had expanded its product range, adding accessories and fragrances. In 1920, the brand officially registered its signature check pattern, which would become synonymous with luxury and British heritage. The check pattern was integrated into a variety of products, from scarves to handbags.

Amidst evolving fashion trends, Burberry underwent a significant transformation in the 1990s. The company implemented a strategy focusing on the revitalization of its brand image, leading to the appointment of Rose Marie Bravo as CEO in 1997. Bravo emphasized modernizing the product line and expanding into new markets, particularly Asia. This strategy led to a significant increase in revenues, and by 2006, the company reported sales of approximately £1.45 billion.

Burberry's international expansion continued throughout the 2000s, with a notable increase in sales in markets such as China. By 2018, the brand reported a strong performance in the Asia-Pacific region, contributing 43% of total revenue. The company aimed to elevate its luxury positioning by focusing on its heritage while embracing modern marketing strategies, including the use of social media and digital engagement.

In recent years, Burberry has also prioritized sustainability, launching its “responsibility agenda” to target carbon neutrality in its own operations by 2022. In 2023, Burberry announced its partnership with various organizations to enhance its sustainable practices in sourcing materials, with a particular focus on reducing its environmental impact across its supply chain.

The financial results for the first half of fiscal year 2024 indicated a revenue increase of 12% year-over-year, totaling approximately £1.36 billion. This growth was driven by strong performances in both the leather goods and apparel segments, showcasing Burberry's resilience in the competitive luxury market.

To maintain its prestigious market position, Burberry has continued to innovate its product offerings and align its branding with luxury craftsmanship. The brand's focus on digital retail experiences has also proven vital, with an online sales growth of 30% in 2022, emphasizing the importance of e-commerce in its overall strategy.

As of the latest reports, Burberry Group plc continues to expand its global footprint, with more than 500 retail locations worldwide. The company remains committed to its growth strategies while upholding the values of quality, heritage, and innovation that have defined it since its inception.

A Who Owns Burberry Group plc

Burberry Group plc is a publicly traded luxury fashion brand listed on the London Stock Exchange under the ticker symbol BRBY. The ownership structure of Burberry comprises a mix of institutional and retail investors, including various asset management firms and individual shareholders.

As of the latest data from September 2023, the largest shareholders of Burberry include:

In total, institutional shareholders collectively own approximately 41.95% of Burberry Group plc shares. Individual investors hold around 5-10% of the company's shares, while the remainder is in free float.

Additionally, the company's management team, including CEO Jonathan Akeroyd, typically holds a modest percentage of shares. As of September 2023, Akeroyd holds approximately 0.15% of the company's shares.

Burberry has also experienced fluctuations in its stock performance. In the fiscal year ending March 2023, Burberry reported revenue of £2.83 billion, an increase from £2.54 billion in the previous fiscal year. The company's operating profit was £473 million, resulting in an operating margin of 16.7%.

As of the latest trading data, Burberry's stock price is approximately £19.25, with a year-to-date increase of around 10%. The market capitalization of Burberry Group plc stands at approximately £7.35 billion.

In terms of dividends, Burberry has maintained a consistent payment schedule, declaring a dividend of 32.0 pence per share for the fiscal year 2023, marking a 5% increase from the prior year's dividend.

The investor base and ownership dynamics suggest a healthy interest from institutional players, reflecting confidence in Burberry's brand strength and market positioning within the luxury goods sector.

Burberry Group plc Mission Statement

Burberry Group plc, a British luxury fashion house, emphasizes its commitment to crafting high-quality products while staying aligned with its core values. The company's mission reflects a dedication to its heritage, which is rooted in innovation and modernity. Burberry's mission statement focuses on sustainability, creativity, and authenticity, aiming to deliver extraordinary products to its customers.

In the fiscal year ended March 31, 2023, Burberry achieved a revenue of £2.7 billion, representing a **10%** increase compared to the previous year. The company's growth can be attributed to its expanding presence in markets such as Asia, particularly China, where luxury consumption has surged.

Burberry is committed to sustainability, underscoring its mission with initiatives aimed at reducing its carbon footprint. The company aims to achieve **net-zero emissions by 2040**, with a **50%** reduction in greenhouse gas emissions by 2025. As part of its responsibilities, Burberry also focuses on responsible sourcing of raw materials, such as cotton and wool, ensuring ethical practices throughout its supply chain.

Innovation is integral to Burberry's strategy, driving its product development and customer engagement. The company has significantly invested in digital transformation, reflected in its **37%** contribution to total sales from online channels, which reached **£1 billion** in FY 2023. This investment has enabled Burberry to enhance customer experiences and maintain its competitive edge in the luxury market.

Furthermore, Burberry has adopted various creative marketing strategies, utilizing social media platforms to connect with younger consumers. This focus on engagement aligns with its mission to remain relevant in a fast-evolving retail landscape, particularly amid increasing competition from other luxury brands.

Burberry's mission statement encapsulates its vision for the future, balancing the need for financial performance with a strong commitment to ethical practices and sustainability. The ongoing emphasis on innovation, along with measurable targets, positions Burberry as a leading entity within the luxury fashion industry.

How Burberry Group plc Works

Burberry Group plc, a British luxury fashion house, operates through a multi-channel business model encompassing retail, wholesale, and e-commerce. As of the fiscal year 2023, Burberry reported revenue of £2.8 billion, reflecting a growth of 11% compared to the previous year. This growth was driven by strong demand in Asia Pacific and increased digital sales.

The company’s retail segment, which includes its flagship stores and e-commerce platforms, accounted for approximately 68% of total revenue, amounting to £1.9 billion. The wholesale segment generated £0.7 billion, constituting 25% of revenue, while licensing and other income contributed £0.2 billion, accounting for 7%.

Geographically, Burberry's revenue distribution indicates a heavy reliance on the Asia Pacific region, which accounted for 39% of total sales. The Americas followed, contributing 23%, with Europe, the Middle East, and Africa (EMEA) making up the remaining 38%.

In terms of product categories, Burberry's core offerings include outerwear, ready-to-wear, and accessories. Outerwear remains the leading category, representing 45% of total sales, primarily driven by the brand's iconic trench coats. Accessories, which include bags and shoes, accounted for 30%, while ready-to-wear clothing constituted 25%.

Burberry has made significant investments in its digital transformation, with online sales increasing by 30% in 2023, now accounting for 30% of total retail sales. This shift aligns with consumer trends favoring e-commerce, particularly following the COVID-19 pandemic.

The company also emphasizes sustainability in its operations, committing to reducing greenhouse gas emissions by 50% per unit of revenue by 2026. Burberry's sustainability strategy is aimed at ensuring responsible sourcing of materials and reducing waste in production processes.

In terms of financial health, Burberry posted an operating profit of £608 million in 2023, translating to an operating margin of 21.7%. The net profit for the same period reached £487 million, with earnings per share (EPS) standing at 147.1 pence, up from 131.3 pence the previous year.

As of September 2023, Burberry's market capitalization was approximately £9.7 billion, and the company maintained a dividend payout of 40 pence per share, reflecting a commitment to returning value to shareholders.

Burberry's strategic focus on digital innovation, sustainability, and expanding its presence in key geographical markets positions it well for future growth amidst an evolving retail landscape.

How Burberry Group plc Makes Money

Burberry Group plc, the luxury fashion house based in London, primarily generates revenue through various segments, with a strong emphasis on retail, wholesale, and digital channels. The company's financial performance as of the fiscal year ending March 2023 highlighted its diverse income streams.

Revenue Breakdown

As per their most recent financial reports, Burberry generated a total revenue of £2.83 billion, reflecting a year-on-year increase of 12% from the previous fiscal year.

Retail Operations

Retail activities account for the largest portion of Burberry's revenue. The company operates approximately 500 stores globally, including flagship stores in key fashion capitals. For FY 2023, retail revenues reached £1.82 billion, a growth of 7.7%, primarily driven by strong demand in the Asia-Pacific region.

Wholesale Business

Burberry's wholesale segment, which includes sales to department stores and specialty retailers, contributed £820 million in FY 2023. This segment saw a 6.5% increase compared to FY 2022, reflecting robust partnerships and brand presence in various markets.

Digital Sales

Digital channel sales have become increasingly vital for Burberry, with an estimated growth rate of 37% in online sales during FY 2023. E-commerce accounted for approximately 24% of total retail revenues, driven by enhanced digital marketing strategies and a streamlined online shopping experience.

Licensing Agreements

The licensing segment has remained stable, generating £90 million in FY 2023, consistent with the previous year. Burberry utilizes licensing agreements to expand brand reach in markets where direct retail presence may be limited.

Key Product Categories

Burberry's product portfolio includes ready-to-wear apparel, accessories, fragrances, and cosmetics. The revenue distribution across these categories for FY 2023 is as follows:

Geographic Revenue Distribution

The geographic breakdown of Burberry's revenue as of FY 2023 illustrates its global footprint:

Key markets such as China and the United States have become significant drivers for growth, with increased consumer spending on luxury goods.

Marketing and Brand Positioning

Burberry spends approximately €150 million annually on marketing, focusing on brand heritage and innovation to drive customer engagement. This investment in branding plays a crucial role in maintaining its luxury status and attracting affluent shoppers.

Overall, Burberry Group plc demonstrates a well-rounded strategy in revenue generation across diverse channels and markets, positioning itself as a leading luxury brand in an evolving retail landscape.