Ricardo Tisci’s new collections are the reason behind the increase in revenue for British label Burberry (OTCMKTS: BURBY). With the recent high stakes overhaul, Burberry shows glimpses of promise.
Burberry shares were up 13.1% on Tuesday, en route to their best day in seven years. In the period, the Company topped market expectations of 2% growth by pushing its sales over 4% after a subpar 1% growth in the previous three months.
This growth comes more than a year after CEO Marco Gobbetti revamped Burberry’s image to a more upmarket one. By June, Ricardo Tisci, highly acclaimed visionary, had his products in Burberry shops, accounting for half the wares. Tisci’s designs will, then, account for 75% of all products in Burberry stores by March 2020.
“The consumer response was very promising, delivering strong growth in our new collections,” Gobbetti said in a statement.
Burberry experimented this period with a new pattern of interlocking “Ts” and “Bs” from the initials of Thomas Burberry in its new monogram collection. Although it was a step away from the classic camel, red, and black check trademark that consumers are used to from Burberry’s collections, the new logo-style print was a hit among millenials from China, a key clientele.
The luxury brand is also trialing a campaign to draw in shoppers through monthly product launches on social media platforms such as Instagram. In April, a black leather pair of pull-on puff sleeves was dropped on Instagram, and it sold out in 20 minutes globally, said Chief Financial Officer Julie Brown.
Despite the rumble, Burberry has a long road ahead in its rebuild process. “It remains to be seen whether the commercial success of Burberry’s new brand identity can be sustained into the remainder of the year on a much larger share of the offering,” Citi analyst Thomas Chauvet said.
The trade name aims to remain on a quest to boost a desired upmarket image. It will reduce markdowns on clothing and other items, weighing on same store sales growth. In addition, some of its stores will be closing, and some U.S. department stores will no longer carry Burberry goods where the store doesn’t fit Burberry’s new direction.