BURBERRY

“Iconic British Luxury”

OVERVIEW
Burberry is a British luxury fashion brand
known for its high-quality craftsmanship and
iconic designs, founded in 1856. It offers a
range of luxury apparel, accessories, and
fragrances. With a strong global presence
through various distribution channels,
Burberry has shown consistent financial
performance and brand recognition. Despite
facing challenges such as competition and
market fluctuations, the company continues to
innovate and expand its reach, particularly in
digital platforms and sustainability initiatives.
BURBERRY STATISTICS

Founded in – 1856
Headquarters – London
Country – England
Industry – Clothing
CEO – Jonathan Akeroyd
Revenue in 2022 – £2,826 million as of April 2022
Profits – £543 million as of April 2022
Number of employees – 8,979 employees
Forbes Ranking – 168 as per Forbes
SWOT ANALYSIS
Why Companies do SWOT Analysis?
SWOT analysis is done to understand
a company's internal strengths and
weaknesses, and external
opportunities and threats. It helps in
making strategic decisions by
leveraging strengths, addressing
weaknesses, seizing opportunities,
and mitigating threats.
STRENGHTS
Financial Growth: Burberry consistently increases
revenue and operational performance, indicating
a promising future outlook.
Iconic Brand Image: With 166 years of history,
Burberry's trench coats and signature check
patterns establish a globally trusted brand.
Wide Distribution Network: Burberry's 418 stores
and diverse sales channels ensure broad market
reach and brand equity.
Distinctive Products and Designs: Burberry offers
high-quality apparel, accessories, and fragrances,
blending craftsmanship with technology for a
competitive edge.
OPPORTUNITIES
Retail Expansion: Burberry can enhance its
physical presence through initiatives like
pop-up stores or shop-in-shops, alongside
store redesigns, to attract new customers
and drive sales.
Online Growth: Investing in e-commerce
and digital capabilities can capitalize on the
growing online retail market, aligning with
evolving consumer preferences for
convenience and accessibility.
WEAKNESSES
Price Limitation: Burberry's high prices
restrict its customer base to affluent
segments, potentially hindering revenue
growth and market expansion.
Asia-Pacific Reliance: Heavy dependence on
the Asia-Pacific region leaves Burberry
vulnerable to shifts in consumer behavior or
economic conditions, impacting operational
stability and financial performance.
Product Focus: While offering diverse
products, Burberry's revenue heavily relies on
apparel, making it susceptible to market
fluctuations and limiting diversification
opportunities.
THREATS
Competition Pressure: Burberry faces intense
competition from luxury rivals like Gucci, Prada, and
Louis Vuitton, jeopardizing its market share and
profits.
Pandemic Impact: COVID-19 disrupts Burberry's
operations, especially in China, leading to economic
downturns, supply chain issues, and changes in
consumer behavior, challenging growth and
profitability.
Raw Material Risk: Burberry's reliance on raw
materials exposes it to supply chain disruptions,
potentially impacting production timelines and
customer demand fulfillment.
Regulatory Challenges: Complying with various
regulations poses hurdles for Burberry, with non-
compliance risking legal and financial repercussions,
impacting operations and profitability.
 PESTLE ANALYSIS
POLITICAL FACTORS
Why PESTLE Analysis is important for companies?
PESTLE analysis is important for companies
because it helps them anticipate and adapt
to external factors that could affect their
operations and performance. By considering
politics, economics, society, technology,
legal factors, and the environment,
companies can make informed decisions to
mitigate risks and capitalize on opportunities,
ultimately improving their competitiveness
and sustainability.
ECONOMIC FACTORS
Tax Policies: High corporate tax
rates impact Burberry's Global Economic Conditions:
profitability. Trade tariffs and Economic downturns reduce luxury
customs duties affect production
spending. Exchange rate
costs. fluctuations impact international
Global Political Scenario: Political sales.
instability forces store closures,
Income Inequality: High-income
disrupts supply chains. Regulatory
inequality limits Burberry's target
changes, like Brexit, complicate
market.
operations.
Interest Rates: High rates
Political Stability: Unstable regions
affect luxury demand, risk store
discourage spending, affecting
damage. FDI policies influence Burberry's sales.
expansion plans.
PESTEL ANALYSIS
SOCIAL FACTORS
Fashion Trends: Burberry must
anticipate and adapt to changing
trends to avoid unsold inventory.
Collaborations with influencers
attract younger consumers.
Demographics: Younger
demographics are key for luxury
fashion sales. Urban populations
with higher incomes favor
Burberry.
Cultural Values: Burberry must
align with cultural norms,
considering dress codes in
conservative societies. Digital
marketing is essential for engaging
tech-savvy consumers.
TECHNOLOGICAL FACTORS
E-commerce and Digitalization: E-
commerce expansion requires
robust cybersecurity.
Technological advancements like AI
streamline production and reduce
costs.
Social Media and Marketing: Social
media platforms offer cost-
effective marketing channels,
enhancing brand visibility.
Data Analytics: Understanding
consumer behavior through data
analytics improves decision-making
and operational efficiency.
ENVIRONMENTAL FACTORS
Sustainability: Burberry must
adopt sustainable practices to
reduce carbon emissions and
waste, ensuring compliance with
environmental regulations.
Climate Change: Climate impacts
raw material availability and
production costs. Burberry needs
strategies to mitigate these
effects, like diversifying suppliers
and using sustainable materials.
LEGAL FACORS
Intellectual Property (IP) Rights: Protecting
designs through trademarks, copyrights, and
patents is vital.
Employment Laws: Compliance with minimum
wages, working hours, and employee rights is
essential for Burberry's global operations.
Consumer Protection Laws: Burberry must ensure
product quality and accurate marketing to avoid
legal issues.
Trade and Tariffs: Navigating international trade
regulations and tariffs is necessary for Burberry's
global business.
Environmental Regulations: Compliance with
waste disposal and emissions standards is crucial.
Advertising Standards: Adherence to regulations
ensures accurate and culturally sensitive
marketing.
Taxation Laws: Management of corporate tax rates
and other tax obligations is necessary across
jurisdictions.
Import and Export Restrictions: Awareness and
compliance with restrictions on goods and
materials are vital for international trade.
Burberry 2022/23 Financial Highlights
Revenue Growth:
£2,826M ➜ £3,094M
Signifying robust sales growth.
Cost of Sales:
£815M ➜ £911M
Indicates increased production costs.
Gross Profit:
£2,011M ➜ £2,183M
Maintaining healthy profit margins.
Operating Expenses:
£1,498M ➜ £1,572M
Covering marketing, admin, and distribution.
Other Operating Income:
£30M ➜ £46M
Possibly from non-main business activities.

INCOME STATEMENT
Operating Profit:
£543M ➜ £657M
Reflecting improved operational efficiency.
Financing:
£32M ➜ £23M
Lower financing costs.
Profit Before Taxation:
£511M ➜ £634M
Indicating overall financial improvement.
Taxation:
£114M ➜ £142M
Reflecting higher taxable income.
Profit for the Year:
£397M ➜ £492M
Demonstrating growth and profitability.
Adjusted Profit Before Taxation:
£492M ➜ £613M
Excluding certain adjusting items.
Adjusted Earnings Per Share:
Basic: 94.5p ➜ 123.1p
Diluted: 94.0p ➜ 122.5p.
Dividends:
Interim: 11.6p ➜ 16.5p per share
Proposed Final: 44.5p per share (compared to 35.4p in the previous year).
Burberry 2022/23 Financial Highlights
Assets:
Non-Current Assets: £1,823 million
Intangible assets
Property, plant, equipment
Right-of-use assets
Deferred tax assets
Trade and other receivables
Current Assets: £1,863 million
Inventories
Trade and other receivables
Derivative financial assets
Cash and cash equivalents
Assets held for sale
Liabilities:
Non-Current Liabilities: £1,318 million
Trade and other payables

BALANCE SHEET
Lease liabilities
Borrowings
Deferred tax liabilities
Retirement benefit obligations
Current Liabilities: £829 million
Trade and other payables
Bank overdrafts
Lease liabilities
Derivative financial liabilities
Income tax liabilities
Net Assets: £1,539 million
Equity:
Capital and Reserves Attributable to Owners: £1,533 million
Ordinary share capital
Share premium account
Retained earnings
Non-Controlling Interest in Equity: £6 million
CONCLUSION
Burberry demonstrates robust financial performance
with significant revenue and profit growth, effective
cost management, and operational efficiency. The
brand enjoys strong global recognition due to its rich
heritage, iconic products, and celebrity
endorsements. However, Burberry faces challenges
like heavy reliance on high-income consumers and
the Asia-Pacific market, intense competition, and
economic vulnerabilities. To sustain growth,
Burberry should expand its digital and retail
presence, diversify its product range, and invest in
sustainability initiatives. This strategic focus will help
Burberry maintain its competitive edge in the luxury
fashion market.
THANK YOU!