Annual report and account analysis highlights the overall condition of a particular company. It not only elaborates the financial condition of the company, but it also takes in consideration other aspects of evaluation such as, management and corporate social responsibility. Annual reports are published by the companies annually, whereas few of them also publish quarterly. The reports are important for the company itself and also, for investors who are interested in investing in the same. The annual reports are also useful to the auditors who audit the financial statements. The analysis of the financial statements, present in the annual report, identifies the financial status of the company, which are very important for the investors’ knowledge. The essay elaborates the annual report and accounts analysis of a luxury fashion house, Burberry Group Plc. It highlights the financial statement analysis of the company as well as depicts the strength of efficient management. The Director’s Report described in this essay summarizes marketing, financial and operation activities of the company.
Burberry Group Plc., luxury fashion house in Britain which distributes clothing and fashion accessories as well as licensing fragrances. One of its most hugely copied trademarks is the typical tartan pattern. Mostly famous for its trench coats, Burberry was designed and found by Thomas Burberry. The company has established stores as well as franchises worldwide and also, sells through acquiescence in third-party houses. Queen Elizabeth II and Prince of Wales had granted Royal Warrants to the company. Christopher Bailey is the Chief Creative Officer. It is listed on the London Stock Exchange as well as on the FTSE 100 Index. A 2013 report by Interbrands revealed that Burberry ranked the 77th among the most valuable brand in the world then (Burberry Group Plc., 2013b).
Since its foundation in 1856, it has remained quintessentially the best in the outwear industry. The company has made its brand unique by introducing digital luxury positioning and optimisation in mediums of trench coats along with establishing its place among generations and genders. The company has developed new channels of marketing, brought in new product designs, initiated digital marketing and also, made different retail strategies, so as to tap every part of the world. The company has been a consistent performer who has developed a sense style statement among the generations and genders. Creative thinking has been the main motivator of the company along with the cross-functional collaboration and meritocratic ethos.
The company aims at selling its product to end consumers through wholesale and retail channels. The financial year 2012/13, has encountered 71% of revenue and 24% of wholesale. The company has also introduced licensing agreements in Japan and worldwide, which has given leverage to the technical and local expertise of licensing. It has undergone 7% growth in revenue and has expanded its store by 5%. The following diagram describes the diversified product mix of the company.
Figure 1: Diversifies Product mix
(Source: Burberry Group Plc., 2013a)
The figure elaborates product diversification among the genders, along with revenue which is collected from each of the section. It has been noticed that accessories has collected the highest revenue for the company. Therefore, it indicates that the accessories of Burberry Group Plc. have captured a significant position in the minds of customers and so they come for repeat purchase. Another noticeable part of the figure is the revenue collected from the women section by the company.
The strategies undertaken by the company are as follows:
1) Leverage the franchise: It concentrates on enhancing the consumer resonance.
2) Brand momentum: It ensures the purity, strength and positioning of Burberry brand which has remained a priority for many.
3) Beauty: Burberry, on October 2012, had announced the conversion to a directly operating structure from a licensed fragrance and make-up business. The consumers have already encountered the elegance of Burberry as a brand and therefore, the brand has experienced an outstanding growth in form of company image. The business integration was, however, completed within the year of inauguration, which is 1 April 2013.
4) Burberry World Live: Burberry Regent Street, which was opened in September in the heart of London, has been the most expressive part of the brand. It introduced the idea of ‘Burberry World Live’ and in the process, brought under light all the aspects of Burberry. The concept, thus, offered full collection of clothes and accessories in an enhanced digital environment. The store gave product satisfaction to their customers by providing them with hundred screens throughout the store, which included product specific content that is triggered by RFID-enabled merchandise on the mirrors that turned instantly into screens. In the store, users can watch their key brand live from any location. The products included the women wear A/W13 and S/S13 runway shows. The store gave a live expression to the innovative digital launches of the brand. This comprised of live music events that featured artists of Burberry Acoustic and first experience at the store of Burberry Bespoke.
5) Digital: The investment made in burberry.com had been continued after the expanded delivery to 100 countries. The Spanish and Korean brought in a number of languages online. Additional 84 stores were rolled out which extended global streaming of the brand content in the flagship market. Retail theatre was rolled out to a further 84 stores, after the extension of the global brand under the flagship of the market
6) Brand recognition: The company has been listed in Top 100 Global Brands for the fourth time in consecutive years. Burberry was recognised as the most luxurious fashion brand which has increased the values for itself.