Burberry could triple stores to 55

Burberry hopes to double or triple store numbers in the next few years, following the end of its license with Sanyo. The UK luxury brand has already been working hard to build up its directly managed stores but will really start to expand from this year. The closure of the cheaper and more basic licensed stores will mean Burberry can at last shift its brand in Japan to match the global luxury positioning.

Burberry plans to as much as triple its directly operated store network in Japan to between 30 and 55 stores in the next three years. The move will be part of a broader investment in the Japanese market following the cancellation of its license agreement with Sanyo Shokai and Mitsui in July.

By greatly expanding store numbers, Burberry hopes to quickly stamp out the licensed brand image which has hindered its development in the Japanese market. Although Burberry already operates 16 stores, the more than 300 outlets selling licensed product from Sanyo and other Mitsui-managed licensees means that the much higher positioning of the global brand is diluted. Prices at Sanyo stores are markedly cheaper than Burberry direct stores, with the signature trench coats averaging ¥200,000 at the latter and ¥140,000 at Sanyo stores.

Accordingly, the first aim of the directly managed business will be to clean up its brand. As well as more stores, Burberry is expected to hold high profile events to underline its luxury positioning. It will also invest in marketing its other brands such as Burberry Prorsum, Burberry London and the casual line Burberry Brit.

Burberry Brit will be a crucial part of Burberry‘s plans to greatly increase marketing efforts to 20 to 30 year olds – Sanyo targeted this market through its Burberry Blue and Black labels, but these will no longer be sold with the Burberry name. The cosmetics brand, Burberry Beauty, will also be used in marketing to the young.

Tripling the number of stores should be relatively easy given Burberry‘s intensely strong links with department stores. Many have already indicated they are keen to hand over choice sales space on the street level for a full sized Burberry concession, even while fearful of the impact of the loss of the lucrative and still popular licensed concessions run by Sanyo.

The harder task will be finding suitable locations for high profile stand alone stores, although again some of this work has already been completed during the collaborative years between the brand’s Japan office and Sanyo/Mitsui. Late last year, Burberry moved its Omotesando store, expanding the size by 1.6 times.

To start with, Burberry will open a new store in Shinsaibashi in March followed by another in Shinjuku in the Autumn, with plans to rebuild in Ginza too next year.