professionalblackjack| This luxury brand's annual profit fell by 34%, and its share price has halved compared to the same period in 2023! Second-hand prices are even more "diving"

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After the Gucci sales plummeted, another major international luxury goods fell into a "difficult to sell" situation.

On May 15, local time, British luxury goods group Burberry Burberry (Burberry) reported results for the fiscal year ended March 30, with revenue down 4% to 29%.ProfessionalblackjackAdjusted operating profit fell 34 per cent to 418 million pounds (3.8 billion yuan), while gross profit fell 8 per cent to 2 billion pounds (18.3 billion yuan), with a gross profit margin of 67.7 per cent.

A reporter from the Daily Business News noted that Burberry's sales in the Asia-Pacific market fell further, with overall same-store sales falling 17% year-on-year in the fourth quarter of fiscal 2024, including a 19% year-on-year decline in the mainland market.

This luxury, which was born in 1856, has long been famous on the world fashion stage. The British style Burberry trench coat is regarded as the "ceiling" of the trench coat world and has been sold for a century. The reporter interviewed and learned that the sales of the brand in OUTLETS are very hot. But on the other hand, a number of people in the second-hand luxury industry told reporters bluntly: in recent years, the preservation rate of Burberry continues to decline. According to Zhou Ting, an expert in the luxury industry, the current second-hand price of Burberry is basically 90% to 70% discount.

By the close of trading on May 15, Burberry shares had fallen by about half from a year ago. How to stabilize the Chinese Market by BurberryProfessionalblackjack?

Although Burberry handed over a report card with annual sales of nearly £3 billion in fiscal year 2024 (April 1, 2023 to March 30, 2024), its revenues and profits both fell compared with the same period a year earlier. Of this total, adjusted operating profit fell 34 per cent from a year earlier (25 per cent at a fixed exchange rate) to £418 million from £634 million a year earlier.

If you take a closer look, you can also see that Burberry sales have been very weak in some key markets and regions, and continued to deteriorate in the most recent quarter.

Burberry same-store sales fell 1% year-on-year for the whole fiscal year and 12% in the fourth quarter, according to the financial report. In terms of regional markets, the Asia-Pacific region, which accounts for about 40 per cent of total Burberry sales, grew only 3 per cent year-on-year and fell 17 per cent in the last quarter due to the Chinese market. It is worth noting that Burberry's sales in mainland China fell 19% in the fourth quarter from a year earlier, and the size of its customer base fell 12% in that quarter compared with the same period a year earlier.

In addition, Burberry's sales in the Americas (covering Europe, Middle East, Africa and India) fell 12 per cent in the fourth quarter of fiscal 2024 from a year earlier.

During the period, Burberry opened 9 new stores, including direct stores and Olai stores, a total of 422 stores. Among them, the number of stores in the Asia-Pacific market, the American market and the EMEIA market is 239,83,100 respectively.

Jonathan Akeroyd, CEO of Burberry, also admitted that the company faces challenges in the context of slowing demand for luxury goods, and its fiscal year 2024 results are lower than expected, but Burberry will use the lessons learned in the past year to adjust its methods while adapting to the external environment.

Looking ahead, by accelerating the reduction of distribution channels, Burberry expects wholesale revenue to fall by about 25% year-on-year in the first half of this year, and hopes performance may improve in the second half of the fiscal year. Meanwhile, Burberry expects revenue for fiscal 2025 to fall by £30 million year-on-year and adjusted operating profit to fall by £20 million, based on exchange rates as of April 25, 2024.

"the decline in brand image is the main reason why Burberry's performance is poor and the capital market is not optimistic about it." Zhou Ting, an expert in the luxury industry, said in an interview with the Daily Business News that Burberry is actually one of the most recognized luxury brands in China. It is in a clothing market that has more high-frequency consumption attributes than many brands in the luggage market. But many of Burberry's strategies have made the brand "popular". She further said: "the widespread fakes, high market visibility and enthusiasm for discount channels have lowered the image of Burberry to a certain extent."

In Zhou Ting's view, once the brand image of luxury goods has come down, it is not high-end; and the market visibility is too high, it is no mystery; in addition, Burberry also has the problem that "products are too old-fashioned and younger consumers do not choose." as a result, core consumers begin to abandon Burberry.

British ancestry is a brand story that Burberry is keen to tell, and its birth is very practical-clothes designed to withstand the vagaries of British weather. Since it was founded in 1856, it has developed into a world-famous luxury brand. Lightweight and durable trench coat and soft scarf are the classic styles of Burberry.

"as soon as it rains, the whole of London is covered with Burberry." Burberry has even become another synonym for "British style".

Ready-to-wear has always been the main product of Burberry. According to the company's latest results, women's clothing revenue fell 1 per cent year-on-year to £860 million, while men's clothing revenue fell 3 per cent to £842 million, but this is by comparison the "most resilient" sector. Revenues from Burberry accessories fell 6 per cent year-on-year to £1.055 billion and children's clothing and other categories fell 19 per cent to £149 million.

Some netizens shared the sales of Burberry in Shenyang during the National Day holiday in 2023. The picture shows that a long-sleeved shirt of the brand costs only 900 yuan, compared with its original price of several thousand yuan, the discount is so strong that consumers are still waiting in a long line at night.

Shang Xiuli, deputy secretary general of the China Chamber of Commerce and president of the OUTLETS branch, told the Daily Economic News: OUTLETS in China, Burberry sales are really good, its trench coat, cotton-padded coat, scarf has been very popular, especially in autumn and winter, many of its classic models will be sold out.

Although there is a view that Olai's discount price is a double-edged sword for luxury goods, in Shang Xiuli's view, OUTLETS is strict in brand selection, which is well recognized by Chinese consumers, and the hot sales of Burberry in OUTLETS stores in China have also made an important contribution to the brand's performance.

In contrast to OUTLETS's fervor, Burberry continues to be less than expected in the secondary market for luxury goods.

According to a survey by the Daily Economic News, the hedging rate of Burberry products is decreasing year after year. "In 2020, a good Burberry tote bag could sell for more than 6000 yuan in the second-hand market, but now it is about 4500 yuan." Lu Xi, director of operations of Zhonghengxin, a luxury goods appraisal agency, told the reporter of "Daily Economic News".

Lu Xi continued to analyze: "Burberry's windbreakers, shirts, and shoes are more recognized than bags, but old clothes and old bags are two different concepts. Consumers generally accept second-hand bags, but it is difficult to accept second-hand clothes."

Burberry's new bags also received lackluster. The reporter noticed that taking Burberry's new mini Pocket pocket bag that sells for 11,500 yuan and has been put on the shelves in recent years as an example, on multiple second-hand luxury goods platforms, the price of 90% of the new product ranges from 4000 yuan to 6500 yuan. Jiang Bo, a technical expert on luxury goods identification at China Inspection and Inspection, said in an interview with a reporter from the Daily Economic News that the consumption power of consumers who buy Burberry is not enough to support the brand's value preservation rate.

If consumers want to sell this Burberry bag to recyclers, the price will drop significantly from the original price. The reporter found that if consumers want to sell a mini Pocket pocket bag that is 95% to 99% new, the recycling price offered by the second luxury merchants is only within 1000 yuan-3000 yuan, which is as low as a discount of the original price.

"Most Burberry products are just high at public prices. This bag is made of canvas, and the recycling market is definitely not as good as other luxury brands." Liu Xiao (pseudonym), who has long been engaged in luxury goods recycling, told reporters.

Many experts have said that "there are classics but no popular models" are the main problems Burberry is currently facing.

"Burberry currently does not have the brand power of top luxury goods." Zhou Ting analyzed to the reporter of "Daily Economic News" that if Burberry can adhere to high-end development, strengthen product innovation capabilities and give full play to its digital advantages from now on, it still has the opportunity to become one of the most popular international luxury goods for Chinese consumers.

Cover picture source: Visual China