Burberry has appointed Gerry Murphy its new chairman. He succeeds John Peace. Murphy has extensive experience in consumer and retail industries. He is an experienced chair and senior board member, having served as non-executive director of companies including British American Tobacco, Merlin Entertainments and Reckitt Benckiser.
He is currently chairman of Tate and Lyle and of The Blackstone Group International Partners, Blackstone’s principal European entity. Before joining Blackstone as a senior managing director in its private equity group, he served as CEO of Kingfisher, Carlton Communications, Exel and Greencore.
Over the past 16 years, British brand Burberry has enjoyed strong growth and evolved into one of the most valuable luxury brands in the world. It plans to go more exclusive. The plan appears to be an attempt to reinvent Burberry as a super-luxe brand, like Hermes and Dior, which have higher prices and margins than Burberry. Currently, Burberry handbags start at about thousand pounds while Hermes starts at three times that price.
Burberry will be taken out of all but the most exclusive stores. True luxury brands command immense pricing power and generate fabulous margins and cash flows. They sell to wealthy consumers and just like their customers are more resistant to downturns.