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Last Tuesday, when Burberry’s share price hit a record high of £12.15, Angela Ahrendts, its 50-year-old chief executive, was on her way back from hosting a fashion show in Beijing, featuring the British rock band Keane and large digital images of Big Ben. But rather than celebrating her company scaling the financial heights, she was looking to go even higher via Burberry’s largest Asian store yet.
The 12,500 square foot behemoth is the brand’s 57th outlet in China, which it expects to become its largest market in five years. If that happens – and given Burberry is not just the lone British fashion company to be part of the FTSE 100, but its best performing non-mineral stock for the past two years, the bets are high – it will mark the brand’s transition from middle-of-the-road British clothing company to full-fledged luxury ship of state; a corporate vehicle with all the trappings of a national symbol.
Consider: the first upmarket brand Kate Middleton wore during her coming-out phase as princess-to-be was a Burberry trench coat; Ms Ahrendts was one of the first appointees on David Cameron’s Business Advisory Group; and Prince Charles opened Burberry’s London headquarters in October 2009. Burberry has made it its mission, more effectively and unabashedly than any other British brand, to sell Britishness to the world. It uses only British celebrities such as actress Emma Watson or musician Gwilym Gold in its advertising. It promotes only British bands on its music site. It even brought its women’s wear show back from Milan to become the centrepiece of London Fashion Week in September 2009.
The irony is that Ms Ahrendts, the woman most responsible for this – the woman who sat down on her appointment in 2006 with creative chief Christopher Bailey and drew up plans to hone the brand’s identity on a napkin – is American. And not just American: mid-western, small-town, apple-pie, Colgate-smile-and-Breck-hair-American.
Born in New Palestine, Indiana, the third of six children, a cheerleader, tennis player and clothes-lover, Ms Ahrendts went to Ball State University, and married her high school sweetheart, with whom she has three children. She came to New York in 1981 and began navigating the 7th Avenue garment world, spending time at Warnaco, as well as Donna Karan and Liz Claiborne, where she was in charge of contemporary brands such as Juicy Couture, Ellen Tracy and DKNY Jeans.
When former Burberry chief executive Rose Marie Bravo was looking for a successor in 2005, designer Christopher Bailey, who had worked with Ms Ahrendts at Donna Karan, suggested her for the post. “We’re both outsiders,” Mr Bailey, who is from Yorkshire, has said of Ms Ahrendts, and today the two work so symbiotically they have connecting offices.
Ms Ahrendts is not just an outsider by nationality, however, she is also a luxury outsider; one of a new wave of unsentimental mass market-executives who have been wooed to the high-end in recent years, transforming the industry with an understanding of back offices and supply chain logistics, and a strong sense of opportunism.
Still, not everyone was convinced by the appointment. Burberry had come through a difficult time, having been co-opted, and hence devalued, by an association with British “chav” culture. There were also charges that the brand, and especially its signature check pattern, was too ubiquitous – and doubts that an executive from the mass market world of Juicy and jeans would understand how to fix it.
Upon arrival, however, Ms Ahrendts streamlined the organisation, closing down 35 product categories she felt diluted its image. She also made the controversial decision to move polo shirt production offshore, and began a lengthy process of buying back licences and franchises – spending £65m on 50 Chinese franchise stores in 2010 alone. When the recession hit, and the stock tumbled to £1.60, Ms Ahrendts cut costs by £50m, staff by about 10 per cent and upped her focus on “the brand”.
She understood in particular that history has value in an era of economic uncertainty, One of the first things she did was to come up with the “three core values of the company: ‘protect, explore, inspire’,” words taken from a pamphlet written by founder Thomas Burberry. But her much-vaunted digital strategy – Burberry was the first luxury brand to live-stream a fashion show in 3D around the world, to allow customers to order products straight from the catwalk – is also driven by a desire to “connect consumers directly to the brand”.
As a result, Burberry came through the recession in better shape than most luxury companies, with record profits in 2009 and a current market capitalisation of more than £5bn, with Ms Ahrendts winning a bonus of £1.8m for her part in the success. And yet, through it all, when colleagues talk about her, the word that keeps coming up (and this is rare in luxury circles) is “nice”. “I’ve never heard her raise her voice,” says one long-term associate. “She’s a listener,” says another. She calls herself a “merchant” and talks a lot about her “team”.
Critics sometimes wonder if a brand built essentially on one garment – the trench coat – can continue to sustain growth on such a thin aesthetic base. But aside from expansion in China, Ms Ahrendt’s strategy is to focus Burberry on three product lines, so the brand takes on a pyramid shape resting on a broad base of casual wear and haloed with luxury at its (tiny) pinnacle. With this, the company looks less like other European luxury leaders, such as Chanel or Louis Vuitton, and more akin to US giant Ralph Lauren, the world’s largest luxury clothes business, and one that also sells a certain version of England. However, whereas Ralph Lauren is dependent on its eponymous founder, Burberry, as Ms Ahrendts points out, “is not about me”. It is, rather, about being “the only British luxury brand of global scale”. An empire, by another name.
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