27 January, 2020
Ahmad E. Hamid
$5.2 billion. Sounds like the revenue numbers of a successful company, no? As the Coronavirus spreads globally, we all have our fears and hope for the well-being of our friends and family. Burberry, an international fashion house, based in London, England has other concerns.
Forbes recently reported that sales rose 3% to $940 million in Burberry’s third quarter, thus raising its 2020 revenue forecast. China and the Asian continent as a whole have been one of Burberry’s largest markets for several years, but recent events have altered that track record.
Hong Kong’s famous 2019 protests have been a clear sign of social factors modifying the success of business. The former British colony controlled 8% of sales internationally for Burberry, but after the protests began, that figure split nearly in half. Burberry is now proceeding with caution due to the outbreak of the Coronavirus in this market.
Last Wednesday, Burberry’s stock was down 3.71%, as many investors sold off shares in fear that this virus, similar to pneumonia, will have long-term effects on the sale of luxury goods and international travel. Burberry’s famous head designer, Riccardo Tisci, who has previously worked for French fashion brand Givenchy, came to Burberry in 2018 and introduced new designs and styles beyond the traditional pattern. This change in creative direction has created a push in the European, Middle Eastern, and African markets, but has stayed stagnant in the United States.
Burberry CEO, and American University Kogod School of Business alumnus, Marco Gobbetti commented, “while mindful of the uncertain macroeconomic environment, we remain confident in our strategy and the outlook for FY 2020” (Forbes).
The company decided to cater to the Chinese market with a successful Lunar New Year campaign and will even be hosting its Autumn/Winter 2020 fashion show in Shanghai, come April. My personal take is that the company can better enrich itself with the Chinese market by investing into medical research to care for the Chinese citizens and those across the world who could potentially be affected by the Coronavirus.
Original Source: “Burberry Lifts Sales Outlook But Monitors China Coronavirus Outbreak” by Isabel Togoh. https://www.forbes.com/sites/isabeltogoh/2020/01/22/burberry-lifts-sales-outlook-but-monitors-china-coronavirus-outbreak/#f451e4262682