Burberry plans networking site

18 September 2009

LONDON: Burberry, the £2bn ($3.3bn; €2.2bn) luxury fashion brand, is to launch its own social networking site next month in a bid to strengthen ties with existing customers and attract new interest.

The site, to be christened artofthetrench.com, will build on the firm's 660,000-strong Facebook following and will invite customers to send in photographs of themselves wearing the iconic raincoats.

Angela Ahrendts, Burberry's chief executive, told the FT: “These might not even be customers yet. Or they may be a customer for a bottle of fragrance or for eyewear. But these are the customers who need the brand experience, who need to feel the brand. That word-of-mouth spreads through their social networks and continues to be a positive conversation.”

While efforts by other retailers such as the US-owned Sears and the UK-based Asda to launch social networks have been greeted with scepticism, analysts believe that Burberry's move is in keeping with its long-running drive to woo the young.

The firm is currently in the middle of a three-year strategy review with a focus on the “digital shift,” according to Ms Ahrendts, who has cut costs, focussed on core lines and introduced online sales since taking the helm in July 2006. Internet sales are already outpacing some flagship store sales by three-to-one.

In its most recent results for the three months to June, Burberry said retail sales were holding up, helped by overseas visitors to Britain, but confirmed that wholesale revenues had dropped by 28%, partly because of weak sales to US department stores.

While the firm is regularly identified as a potential takeover target, Ms Ahrendts said she hoped it would stay independent for a long time. “It's better for us to continue to go it alone, to stay dynamic, to stay flexible,” she said.

Data sourced from Financial Times; additional content by WARC staff