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Burberry coated in glory

British brands have not shown much optimism of late and when there has been something to celebrate, for instance with the recent results from Marks & Spencer or British Airways, the figures are accompanied with dire warnings about the “challenging circumstances” ahead. by way of illustration

But Burberry has just produced an impressive set of full year figures with pre-tax profit up from ￡156 million to ￡196 million and the company remains bullish about the future Sorry,I must be go shopping.

Chief executive Angela Ahrendts, in the job for less that two years and an American, believes Burberry’s growth can continue, albeit much of it is expected to come from the US and other overseas markets. She said: “Brand momentum remains strong and we are continuing to invest in the future.”

The healthy set of results is also due to a streamlining of back office operations and distribution. However, the company also seems to have easily shrugged off factors that at one point looked like seriously undermining the brand. It is only a few years ago that Burberry became a signifier of “chav” dressing and the appeal seemed to be heading downmarket quickly. by way of exception

Add to this the very public furore surrounding the closing of the Welsh manufacturing plant early last year and it appeared that negative associations were crowding round the brand. Several prominent Welsh media and political personalities spoke out against Burberry, including the star of one of its own ad campaigns, and a sign of the pressure the company felt was the fact it pulled out of sponsoring a pre-Bafta party

However, the chav association has not travelled with the brand to overseas markets, while the anger at the outsourcing of manufacturing has died away. In December 2006 mad.co.uk took the temperature of the brand via YouGov’s BrandIndex and its Buzz rating was at a year low of -6, whereas on Tuesday 27 May, the day before the latest financial results were released, it stood at -1.8.

Burberry has regained customer favour by concentrating on creating desirable accessories, such as the Warrior bag while some canny marketing decisions may also have helped. The Spring/Summer campaign did not feature long term brand muse Kate Moss but introduced rising models such as Agyness Deyn and Lily Donaldson. They are now appearing in hipper and edgier magazines than Ms Moss, who seems to have taken up residency in the tabloids.

Burberry’s smooth ride can still be derailed and it is not immune from missteps. For instance, the reasons behind the short-lived tenure of head of global marketing Leslie Dance have never been made clear. The former Motorola executive left after six months and brand marketing now lies in the hands of vice president of marketing and communications Sarah Manley

Some observers also suggest that it is only premium luxury goods brands that can escape a recession unscathed. Burberry is still an affordable brand to the upper end of the mid market and if this demographic feels insecure enough to cut back its spending the company will feel the impact. This could be even more pronounced in the US which is deeper into economic gloom than the UK.

Ahrendts does acknowledge that the financial climate is tougher but the confidence being exhibited is heartening and the company is planning to increase investment in manufacturing. The next couple of quarters should illustrate if Burberry can buck the trend and keep on an upwards growth curve. by way of illustration