Latest / The Pivot Podcast with Fexingo: How Businesses Change Direction and Survive Disruption / How Burberry Pivoted From Plaid to Luxury House
Transcript
- Lucas: There's a moment in every brand's life when the thing that made you famous starts to make you irrelevant. And for Burberry, that thing was the plaid check. Luna: The check that was everywhere — scarves, hats, umbrellas, dog collars. It went from status symbol to suburban cliché. Lucas: Exactly. By the early 2000s, Burberry had licensed its famous check pattern onto everything from cheap perfume to toilet bags. The brand was sold in discount outlets and pubs were selling knockoffs. Revenue was flat around 600 million pounds, and the stock was languishing. Lucas: Then in 2006, Angela Ahrendts took over as CEO, and she brought in Christopher Bailey as chief creative officer. And together, they engineered one of the most disciplined brand pivots in luxury history. Luna: I remember the headlines — 'Burberry kills the check.' That took guts. It was like 80 percent of their products had some plaid element. Lucas: More than that. They actually cut the number of product categories from 35 to just 5. They pulled licenses from 23 different partners. They closed 35 of their 54 stores in Japan, which was a massive check market. The goal was to reclaim control of the brand. Lucas: And here's the concrete number: between 2006 and 2014, Burberry's revenue went from about 1.3 billion pounds to 2.5 billion. Operating profit more than doubled. The stock price went from around 300 pence to over 1,500 pence. Luna: But they didn't just kill the check. They elevated the trench coat. That became the hero product. Lucas: Right. The trench coat was always Burberry's original innovation — invented by Thomas Burberry in 1879, adopted by the British Army in World War I. Ahrendts and Bailey repositioned it as the core of the brand. They launched a 'Burberry Bespoke' service where you could customize your trench coat, and they made sure every marketing image featured it. Luna: And they went all-in on digital. I think Burberry was the first luxury brand to live-stream a runway show, back in 2010. Lucas: That's right. They launched a digital platform called 'The Art of the Trench' where customers uploaded photos of themselves wearing the coat. They were early adopters of social media, augmented reality in stores, and RFID tags in products. It wasn't just about selling clothes — it was about building a digital community around the brand. Luna: But I want to push back a little. Isn't there a risk that in killing the check, they also killed the heritage? Some customers felt the brand lost its Britishness. Lucas: It's a fair point. And Burberry did get criticized for becoming too fashion-forward under Bailey. But look at the alternative — if they had kept the check everywhere, they'd have been stuck in the same downward spiral as brands like Ralph Lauren or Coach before their turnarounds. Lucas: Actually, Coach is a great comparison. In the mid-2010s, Coach was also over-licensed and discount-dependent. They brought in a new CEO and creative director, cut down distribution, and elevated the leather goods. Burberry was just earlier — and more aggressive. Luna: So the lesson is: sometimes you have to kill the very thing that made you famous to survive. Lucas: Exactly. And it's not just fashion. Think about Netflix killing DVDs. Or Adobe killing boxed software. The discipline to say no to profitable short-term revenue in service of long-term brand equity — that's really hard. Lucas: By the time Ahrendts left in 2014 to join Apple, Burberry had tripled its market cap. The brand was back in the luxury conversation with Gucci, Louis Vuitton, and Prada. Luna: And then after Ahrendts, Marco Gobbetti came in and pivoted even further upmarket, which also faced challenges. But that's a different episode. Lucas: If today's breakdown of Burberry's pivot actually helped you think about your own business or brand — even in a small way — that's exactly what we're here for. And the reason these episodes stay ad-free and focused is listener support at buy me a coffee dot com slash fexingo. Luna: Yeah, it's a way to keep the conversations grounded and useful. No sponsors, no scripts — just the stories. Lucas: So back to the brand discipline angle. One of the most counterintuitive moves Burberry made was raising prices while cutting distribution. Normally, when you shrink your footprint, you lose leverage. But they wanted scarcity. Luna: And they invested in their own stores — not just in London or New York, but in China. That was a big bet. Lucas: Huge bet. China was becoming the largest luxury market in the world, and Burberry had been relying on local partners. Ahrendts bought back the Chinese operations from a partner in 2010, and by 2014, China was Burberry's second-largest market. Lucas: They also did something interesting with the check. They didn't eliminate it entirely. They kept it on a few heritage products — the classic scarf, the trench coat lining — but removed it from fast-fashion items. So it became a mark of authenticity rather than a ubiquitous pattern. Luna: That's smart. It's like when Porsche kept the 911 the same shape even as they added SUVs. The iconic element becomes a badge, not a commodity. Lucas: Exactly. And the numbers prove it worked. From 2006 to 2014, the average price of a Burberry item went up about 50 percent. The customer base got richer and younger. They went from 'the brand your mum bought at the airport' to 'the brand your daughter lusts after on Instagram.' Luna: But was it all smooth? I recall a few missteps — like when they closed their London flagship for renovation and sales dipped. Lucas: Right, short-term pain for long-term gain. The flagship on Regent Street was closed for almost two years. During that time, tourism sales in London dropped. But when it reopened in 2013, it was a digital marvel — RFID tags triggered content on mirrors, customers could customize products on iPads. It became a destination. Lucas: The bigger point is: the pivot wasn't a single event. It was a sequence of disciplined choices over nearly a decade. And the hardest part was the first step: admitting that the check — your biggest asset — was actually your biggest liability. Luna: So what's the takeaway for a business owner listening today? What's the 'check' in their company? Lucas: It's that one product or channel that generates cash but is dragging your brand downmarket. Maybe it's a wholesale deal that undercuts your direct sales. Maybe it's a legacy software product that's keeping you from cloud transformation. You have to be willing to starve it, even if it hurts revenue for a quarter or two. Lucas: Burberry's story shows that if you do it right — with a clear vision for what the brand should stand for — you can come out stronger. And that's a lesson that transcends fashion. Luna: And if you want more deep dives on brand pivots, you know where to find us. Same time next episode. Lucas: I think we're learning that the best pivots are the ones that look obvious in hindsight but took enormous courage in the moment. Burberry had that courage. Luna: Alright, that's our show. See you next time.