Despite the economic climate, the Burberry group achieved a revenue of £1 billion, and opened more than 70 stores worldwide, ensuring the audience’s rapt attention to their take on risk management. Being an ‘authentic British brand with an iconic portfolio’ means that customers have very high expectations. They require a personalised service, to be welcomed and find top quality products in a comfortable and safe store environment, as well as an after sales service. In answer to these requirements, Burberry are about to launch a global repairs and spares service as people are sending their leathergoods back for repair after 30-40 years of use!
As possibly the most forged brand in the world, IP and brand reputation are at the top of the list of risk drivers for the company. According to Grayer, the speed of Burberry’s growth and the consolidation of the group from four separate entities in the US, Japan, Europe and Spain into a global whole, meant that some administrative areas did not get quite as much attention as they would have liked. Other more commonly shared risk factors include fashion, corporate responsibility (CSR), legislation, vendor selection, raw materials and product performance. These factors need to be managed at lightening speed as the company produce six collections per year.
As the audience was primarily from the UK, Grayer felt it was important to mention the following points:
Firstly that although the brand’s iconic plaid check pattern was adopted a few years ago by ‘chav’ culture which predominates among a certain sector of British youth, the company do not perceive any brand damage from this association, primarily because UK sales account for less than 5% of the business.
Secondly, that the brand do sell products which incorporate fur, although not in the UK and some parts of the USA due to the activities of the animal rights lobby. Grayer stated simply that the product is there because people want it!
Somewhat paradoxically, there is an emphasis on ethical trading and Burberry’s CSR department has begun work from the supply chain to ensure full traceability of the manufacturing processes and good practice in terms of labour and the environment.
Echoed in a number of the day’s presentations, he highlighted the need for brands to ensure traceability in their processes and good relationships with their suppliers to reduce potential problems, or at least be able to resolve them swiftly if they should occur.
Dr Victoria Addy, BLC, advised on the main points to look for in terms of sourcing environmentally sound leathers. She stated that ‘eco-leather’ is something that BLC get asked about on a daily basis and, while there is no hard and fast definition as yet, underlined the following aspects to look at: the type of tannage, the possibility of using ‘green chemistry’ (the production of environmentally high-quality products from preferably renewable resources) such as enzymes, and logistical issues such as transportation and carbon footprint. However, she reminded brands that a ‘green’ leather can’t always perform to the same level as a traditional product.
To respond to this demand from the market of eco-credentials, BLC, in conjunction with the Leather Working Group, offer retailers (whose product meets their specifications) an ‘Eco sure label’ which is designed to demonstrate environmental compliance at point of sale.
Adam Hughes rounded off the event with a look at trends in global manufacturing. While we are all very much aware of the downturn in the economy across the world, the figures cited were stark, particularly for the automotive sector. Hughes stated that car sales in the Republic of Ireland were down a staggering 52% this year, and in Spain, sales were down 40% to a thirteen year low. However, not all was doom and gloom – Mercedes sales in India are reportedly up 47%.
The presentation also provided some interesting points about China. Sales into the Chinese market are not easy, with some 20,000 different standards being applicable and some goods subjected to random checks on entry to the country at customs.
