Checked-out Burberry has things in the bag

BURBERRY Group is betting on growth in handbags and playing up its trademark check as new chief executive Marco Gobbetti seeks to join the luxury industry’s turnaround.

At its first major runway show since Gobbetti took over in July, the trenchcoat maker showed off reversible tote bags decked out in its tartan plaid, including a $2 025 (R26 609) version lined in honey calfskin.

“We have already established a very good platform in accessories and leather goods, but I think we have a great opportunity there,” Gobbetti said since joining Burberry from French rival LVMH’s Celine.

“I’m very confident that will be a big area of development for us.”

In placing a priority on handbags, Gobbetti is borrowing from the strategy of LVMH’s Louis Vuitton and Hermes International, which generate much of their profit from leather goods and are bouncing back from a multiyear slump in Asia.

The new chief executive’s comments signal he’ll seek growth from an accessories business that generated sales of £1 billion (R17.84bn) in the past fiscal year, or 38 percent of Burberry’s total.

While Burberry’s latest quarterly results showed signs of strength in China, the brand is seeking some panache after cutting its accessibly priced Brit and London lines as well as pulling out of many US department stores whose heavy discounting has held back its luxury aspirations. – Bloomberg