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Burberry Tightens Grip with China Deal

Posted by Barry Silverstein on July 16, 2010 02:00 PM

British luxury brand Burberry, still known for its signature black, red and tan check, is hell-bent on protecting its image. The best way to do that is to tightly control the brand, wherever it appears in the world.

That explains Burberry's purchase of 50 stores in 30 cities from Chinese trading partner Kwok Hang Holdings for 70 million pounds. Burberry CEO Angela Ahrendts, who discusses the China acquisition and the brand's growth strategy in the video above, told the Guardian that Burberry was looking to continue "unifying the brand" by taking control of operations in China, a "high-growth luxury region." Burberry will open at least 10 more stores in China this year.

Ahrendts is following in the footsteps of predecessor Rose Marie Bravo, who began buying out Burberry's license holders around the globe years ago.

She is also leading the charge to crack down on counterfeit Burberry products sold online and in some countries.

Counterfeit goods have been a nagging problem for luxury brands. Brand knock-offs not only erode profits for luxury brands, they damage a brand's image. That's why luxury brands are fighting back and, in some cases, they're winning -- as in the $20 million judgment recently awarded Versace.

For its part, Burberry continues to rein in its brand, as well as do unorthodox things that push it further away from its staid image of the past. In late June, for example, Burberry introduced an innovative digital campaign that was described by Vogue as the first interactive extension of a luxury brand.

Burberry is currently running an ad campaign featuring Harry Potter actress Emma Watson -- clearly a ploy to entice a much younger consumer. In fact, you'd be hard pressed to find anyone over twenty on Burberry's U.S. website. Quite a bloody change for a brand that begun in 1856.

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