Burberry Group Plc, the largest U.K. luxury-goods maker, is adding $600 trench coats and $150 Wellington boots to entice U.S. stores into giving the brand more space and reverse falling sales in the world’s biggest economy.
The so-called packable coat, introduced this year, sells for about six times less than the company’s $3,750 lambskin suede version. Famed for its plaid patterns and British heritage, Burberry will “absolutely” expand the trench-coat range as it seeks to exploit “a broader opportunity” in the U.S., chief executive Angela Ahrendts said in a recent interview.
London-based Burberry forecasts that sales to department stores, or wholesale revenue, will fall 25 percent globally in the first half at constant exchange rates as retailers reduce inventory to adjust for shrinking consumer spending. ICAP Plc analyst Simon Kelley sees a “huge” scope for the company to increase a 0.5 percent share of a $40 billion market.
“The U.S. is relatively underpenetrated for us, and arguably we have more product offerings than our peers, and that should give us the opportunity to take market share within those department stores,” chief financial officer Stacey Cartwright said in a separate interview this month.
About 7 percent of Burberry’s sales last year came from U.S. wholesaling. Customers include Nordstrom Inc., Neiman Marcus Group Inc., Saks Inc. and Macy’s Bloomingdale’s.
Burberry said in July that sales in the U.S. remain “difficult.”
