When Stacey Cartwright became Burberry’s CFO in March last year, she must have been looking forward to the glamour associated with working at a suave luxury-goods company.
For poor Cartwright, however, it hasn’t all been swanning about in the classic check-trimmed raincoats and socialising with trendy model and designer types. A flat UK retail market, a weaker dollar and those nasty chavs have all spoiled the party for Cartwright.
Burberry’s third-quarter trading update for the period ending 1 January 2005 showed that sales growth was up a meagre 3%, down on the 8% increase over the previous six-month period. Even though analysts were already expecting a downturn, the drop in sales was still met with disappointment. Burberry stocks lost 3.9% of their value after the announcement, falling 12p to 405.75p per share.
It could be a trying year for Cartwright. If the dollar does not strengthen, the number of US tourists visiting the UK and forking out for the famous Burberry check will remain low, while the flat local market does not look too promising either.
Sales in the US itself, meanwhile, have been hampered by the warm weather and what was described as ‘muted’ response to the latest range across the Atlantic. Cartwright will be praying for a cold, wet spring and a burst of creativity in the design room to turn the situation around.
Annoying as the warm weather and weak currency may be, they surely cannot match the intense irritation the chavs must be causing Cartwright.
Apart from the monotony of addressing the issue at every single public announcement, Cartwright has the task of trying get rid of an element seriously damaging the Burberry brand, but at that same time spending relentlessly in stores.
As Cartwright has acknowledged, the traditional Burberry clientele do not want see the gum-chewing, football-terrace sort attired in the same designer clothing and accessories.
To address the issue, Burberry has dropped the favourite chav item – the baseball cap – from its line and Cartwright has proclaimed that the chav-factor is ‘yesterday’s news’.
Whether the chav faction follows the script remains to be seen, but if they do it will be something of a Pyrrhic victory for the Burberry CFO. With retail sales – 59% of Burberry revenues – not looking particularly bullish, Cartwright may wish that chavs were still dropping by Bond Street and forking out £50 for a cap.
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