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Burberry Collection Working On Merger To Bring Three Other Labels Under Its Banner

Burberry Collection Working On Merger To Bring Three Other Labels Under Its Banner

U.K. luxury goods maker Burberry Group Plc plans unify its collections under one brand to make it easier for customers to understand its product offering.

Burberry will phase out the Prorsum, London and Brit labels by the end of 2016, Chief Executive Officer Christopher Bailey told reporters Tuesday. The new brand, known simply as Burberry, emphasizes the company’s British roots and underscores that all products are designed and developed in London, he said.

“We believe this will make it simpler and more intuitive for our customer,” Bailey said. “This is certainly not cosmetic. It is a huge change.”

Bailey also unveiled plans to build a new manufacturing and weaving facility in Leeds, England. Work on the new site is due to begin next year and be completed by 2019 at an initial cost of 50 million pounds ($77 million). The facility, which will produce Burberry’s trenchcoats, will employ more than a thousand people, said Bailey, who is also chief creative officer.

The moves come after Burberry last month forecast a second year of declining profit because of weakness in Asia. While softening demand in China and Hong Kong has weighed on all luxury-goods makers, Burberry is in a weaker position than peers. The maker of 1,995-pound shearling trenchcoats gets more than 30 percent of revenue from Chinese shoppers, yet only 2 percent from Japan, where many of them are shopping.

The global market for personal luxury goods is heading for its weakest year since 2009 as a combination of stock market turmoil, a strong dollar and a commodity-price rout curb demand, Bain & Co. said last week.



By Andrew Roberts and Lyubov Pronina

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