Burberry has picked an Italian luxury leather goods business as it tries to become as famous for handbags since it’s for trench coats.
The British style house is purchasing the company from CF&P, which is located in Tuscany, and expects the purchase will help it compete against Gucci bags, Louis Vuitton and Celine.
The merged firm would have attracted together Coach’s leather handbags, which sell online for around ￡1,400, and Burberry’s clothes lines which include its signature test patterned trench coats.
CF&P was founded in 2012 with an all-female group and is notorious for producing handbags and other accessories from ostrich, alligator and python skin. It’s been working with Burberry for many years, producing 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 linking as well. The manufacturing site will stay in Italy.
Advisors stated Burberry’s further push into Italy was’a good thing’. Flavio Cereda, an analyst at Jefferies, said:’This additional Italianisation of Burberry is a positive, the group’s cluttered supply chain is a place of concern and proceeds to redress this are welcome. Burberry needs to be taken seriously in leather and this is a start.’
Purchasing CF&P’s branch provides Burberry more control over the design and production of its handbags, which are a hit with wealthy young shoppers — particularly in China.
The team was moving away from traditional handbags towards an edgier and more style conscious style in the past several decades. Its own trench coat-inspired Belt Bag, pictured at right, was launched this year and has demonstrated a success.
The redesign is part of its drive to goal millennials — shoppers aged 18 to 35 — as picture sharing apps like Instagram fuel a desire to have the latest must-have luxury items.
The changes are a part of Gobbetti’s five-year strategy, which will place more emphasis on luxury goods and present higher pricing for new things such as leather bags.
Burberry is just months to the plan but so much analysts are sceptical of the modifications. In January it demonstrated that earnings fell by 2er cent in the last three months of 2017 because customers were purchasing fewer ￡6,000 coats and were instead opting for cheaper products such as ￡95 T-shirts.
The company is expected to announce a 1er cent drop in full-year revenues after this week, along with a 3per cent rise in earnings.