Latest / Building Brands with Fexingo: Identity, Reputation, and Long-Term Business Equity / How Burberry Rebuilt Its Brand After Losing Its Way
Transcript
- Lucas: If you walked into a Burberry store in 2005, you probably didn't. Because the brand had become something you'd find in a duty-free shop next to discounted perfume—not on the arm of someone who knew fashion. Luna: And yet today, a Burberry trench coat still costs well over a thousand dollars, and people queue for it. That's a hell of a turnaround. Lucas: It is. And the story of how Burberry went from almost-ruined heritage to a luxury powerhouse again is really a masterclass in brand discipline. So let's start with the low point: the late 1990s. Luna: What went wrong exactly? Lucas: Two words: over-licensing and the check pattern. Burberry had this iconic plaid—the Nova check—and in the 90s, they plastered it on everything: baseball caps, umbrellas, swim trunks, even dog coats. They licensed the brand to anyone who'd pay. Luna: Classic brand dilution. And it wasn't just tacky—it was dangerous, because the check got co-opted by football hooligans in the UK. It became a uniform for violence. Lucas: Exactly. By 2002, Burberry was synonymous with 'chav' culture in Britain. The Financial Times ran a story about how Burberry hats were being banned from pubs because of the association. And counterfeiters flooded the market—you could buy a fake Burberry cap for a fiver. Luna: So the brand had no cachet. It was everywhere, and it meant nothing good. Lucas: Right. Revenue had stalled around 500 million pounds, and the company's stock was trading at about 200 pence. Enter Rose Marie Bravo, an American retail veteran brought in as CEO in 1997. She was the first outsider to run the company. Luna: And she didn't try to change what Burberry was—she stripped away everything that wasn't Burberry. Lucas: That's the key insight. Bravo's strategy was subtraction, not addition. She cut the number of licensees from over 40 down to about a dozen. She reclaimed control of the fragrance and cosmetics lines, which had been licensed out. And she pulled the check pattern off of cheap products. Luna: But she also had to earn back the trust of luxury retailers. Department stores had started treating Burberry like a commodity brand. Lucas: Yes. So Bravo did something that seems obvious now but was bold then: she invested in building flagship stores on the best shopping streets—Bond Street in London, Rodeo Drive in LA, Fifth Avenue in New York. And she hired Christopher Bailey as creative director in 2001. Bailey was young—only 29—and his mandate was to honor the heritage while making the brand feel modern. Luna: So the trench coat became the hero product again. Bailey redesigned it with new fabrics and cuts, but the silhouette stayed iconic. Lucas: Right. And that's a lesson: when your brand has a genuine heritage asset—like the trench coat, which was invented by Thomas Burberry in 1879—you don't abandon it. You make it the center of everything. By 2005, trench coat sales had doubled. Luna: But the real transformation happened under Angela Ahrendts, who took over as CEO in 2006. She was the one who turned Burberry into a digital-first luxury brand. Lucas: Ahrendts is fascinating. She came from Liz Claiborne, not luxury. But she had a very clear thesis: Burberry wasn't just a clothing company—it was a technology company that happened to make clothes. Luna: She said that verbatim. And she backed it up. Burberry was one of the first luxury brands to livestream its fashion shows. They launched a 'see now, buy now' model years before anyone else. Lucas: They also invested heavily in digital instore experiences. When you walked into the Regent Street flagship in London, every product had an RFID chip. You could hold a coat up to a mirror and see its story—where the wool was sourced, who tailored it. It was immersive retail before that term was everywhere. Luna: And it worked. Under Ahrendts, Burberry's revenue more than doubled, from about 1.2 billion pounds in 2006 to over 2.5 billion by 2013. The stock went from under 300 pence to over 1,500. Lucas: But here's the thing about that digital push—it wasn't about selling online. At the time, luxury brands were terrified of e-commerce because they thought it would cheapen the experience. Ahrendts saw it differently. She said digital was just a new way to tell the brand story. If you tell a good story, people will come to the store. Luna: And they did. The Regent Street store became the most productive luxury store per square foot in London. Lucas: Let's pause here for a second. Because this show is ad-free and listener-supported, and if you've gotten something out of our conversations about how brands rebuild themselves, a couple of dollars a month genuinely makes a difference. You can find us at buy me a coffee dot com slash fexingo. It's one of the simplest ways to keep these episodes going. Luna: Yeah, and we don't run ads, so every bit of support goes straight into the production. It really does help. Lucas: So back to Burberry. The Ahrendts era ended in 2014 when she left to run retail at Apple. And since then, Burberry has had to navigate a new set of challenges. Luna: Such as? Lucas: The luxury market post-pandemic has been brutal for heritage brands. Younger consumers care about sustainability, streetwear credibility, and digital-native marketing. Burberry's trench coat is heritage—but is it relevant to a 25-year-old in Shanghai? Luna: And to answer that, Burberry brought in a new creative director, Daniel Lee, in 2023. He's the guy who revived Bottega Veneta with that quiet-luxury look. And he's trying to do something similar here—stripping back the check pattern, focusing on outerwear, making the logo less prominent. Lucas: But there's a tension. Under CEO Jonathan Akeroyd, who joined in 2022, Burberry has also been trying to push further into luxury, with higher price points and fewer discount channels. That's the right move for margins, but it risks alienating the middle-market customers who kept the brand afloat during lean years. Luna: And it's not just about pricing. The brand's recent campaigns have leaned heavily into Britishness—think rain, fog, tweed. That can feel either authentic or cliché, depending on execution. Lucas: Daniel Lee's first collection for Burberry, shown in February 2024, was actually well-received by critics—he brought back the Thomas Burberry monogram, used muted colors, and emphasized tailoring. But the stock didn't move much. And in the latest earnings for fiscal year 2026, Burberry reported flat comparable sales in Asia, which is their biggest growth market. Luna: So the brand is at another inflection point. They've rebuilt the foundation, but now they need to prove they can grow without losing the scarcity that makes them luxury. Lucas: Exactly. And that's the eternal challenge for any luxury brand: you need to sell enough to stay profitable, but not so much that you destroy your cachet. Burberry managed that balancing act under Bravo and Ahrendts. The question is whether they can do it again in a very different market. Luna: One thing I find interesting is how they're using digital now versus 2010. Back then, it was about innovation for innovation's sake. Now, it's about precision—targeting high-value customers with personalized content, not just livestreaming a show. Lucas: Right. And that's a lesson for any brand, not just luxury. The tools change, but the fundamentals don't: know your heritage, control your distribution, protect your price integrity, and tell a story that resonates emotionally. Burberry's story is really the story of how a brand can die and be reborn—if the leadership has the courage to say no to easy money. Luna: And that's the takeaway. It's not about the trench coat or the check. It's about discipline. The brand that says no is often the one that lasts. Lucas: So next time you see someone in a Burberry coat, remember: that coat almost didn't exist. It took a decade of hard choices to make it worth the price tag again.