Burberry has picked up an Italian luxury leather goods business since it attempts to become as renowned for handbags since it’s for trench coats.
The British style house is purchasing the company from CF&P, which is located in Tuscany, also expects the purchase will help it compete against Gucci, Louis Vuitton and Celine.
The merged firm would have attracted together Coach’s leather handbags, which sell online for up to #1,400, and Burberry’s clothes lines which include its trademark check patterned trench coats.
CF&P was founded in 2012 with an all-female group and is known for making handbags and other accessories from ostrich, alligator and python skin. It’s been working with Burberry for many years, creating handbags which cost between #1,190 and 1,790.
Burberry will purchase the operations from CF&P, with 98 of the manufacturer’s 170 employees joining as well. The manufacturing site will stay in Italy. It brought in fellow Italian Marco Gobbetti, 58, as chief executive, to replace Christopher Bailey, 47, who is stepping down after this year after 17 years in Burberry.
Advisors stated Burberry’s further drive into Italy was’a fantastic thing’. Flavio Cereda, an analyst at Jefferies, said:’This additional Italianisation of Burberry is a favorable, the team’s cluttered supply chain is a place of concern and proceeds to redress this are welcome.
Buying CF&P’s branch will give Burberry more control over the design and production of its handbags, which are a hit with affluent young shoppers — especially in China.
The team has been moving away from conventional handbags towards an edgier and more style conscious style in the past several years. Its trench coat-inspired Belt Bag, pictured at right, was established this year, and it has demonstrated a success.
The redesign a part of its push to target millennials — shoppers aged 18 to 35 — as picture sharing programs like Instagram fuel a desire to have the hottest must-have luxury things.
The modifications are a part of Gobbetti’s five-year strategy, which will put more emphasis on luxury products and present higher pricing for new things such as leather bags.
Burberry is just months into the plan but so far analysts are sceptical of the changes. In January it revealed that earnings fell by 2er percent in the final three weeks of 2017 because clients were purchasing fewer 6,000 coats and were rather opting for cheaper goods such as #95 T-shirts.
The organization is expected to announce a 1er cent fall in full-year revenues later this week, along with a 3per cent rise in earnings.