Burberry, the iconic British luxury brand synonymous with its trench coats and distinctive check pattern, made headlines in 2017 when it announced it would cease production and sales of its own branded watches. This decision, impacting a segment that had been part of the brand's portfolio for decades, sent ripples through the luxury goods industry and sparked considerable speculation about the underlying reasons. While the official statement was relatively brief, a deeper dive reveals a complex interplay of business strategy, licensing agreements, and a broader shift in the brand's overall direction. This article will delve into the intricacies of Burberry's decision to exit the watch market, exploring the multifaceted factors that contributed to this significant change.
Why Did Burberry Stop Making Watches? Discover the Truth
The simple answer to the question "Why did Burberry stop making watches?" is multifaceted and doesn't lend itself to a single, easily digestible explanation. Instead, the decision appears to have been a strategic one, influenced by several key considerations:
* Focus on Core Competencies: Burberry's primary strength lies in its ready-to-wear clothing, accessories like scarves and handbags, and its increasingly successful beauty line. By ceasing watch production, the brand could consolidate its resources and energy on these core areas, allowing for greater investment in design, innovation, and marketing within those established categories. This strategic refocusing is a common tactic among luxury brands seeking to maximize their brand equity and profitability. The watch market, while lucrative, is fiercely competitive, requiring significant investment in research and development, manufacturing, and distribution to maintain a competitive edge. Burberry likely determined that the returns on investment in the watch sector didn't align with the potential returns from strengthening its core offerings.
* Licensing Agreement Termination with Fossil Group: A crucial element in understanding Burberry's exit from the watch market is the termination of its long-standing licensing agreement with Fossil Group. Fossil Group had been responsible for the design, manufacturing, and distribution of Burberry watches for many years. This partnership, while initially successful, likely reached a point where the strategic alignment between the two companies diminished. Burberry, under its new CEO Marco Gobbetti (appointed in 2017), was pursuing a more rigorous brand strategy, aiming for a higher level of control over its product lines and brand image. The licensing agreement with Fossil Group, while providing a convenient route to market, may have limited Burberry's ability to fully realize its vision for the brand. The termination of this agreement therefore paved the way for a complete withdrawal from the watch market, rather than seeking a new licensing partner.
* Brand Positioning and Luxury Positioning: The luxury goods market is extremely competitive, with brands constantly vying for market share and consumer attention. Burberry's strategic shift involved a concerted effort to elevate its brand image and positioning within the luxury sphere. This involved not only focusing on higher-quality materials and craftsmanship but also streamlining its product portfolio to better reflect its desired brand identity. Watches, while a luxury item, might have been perceived as less strategically aligned with Burberry's evolving brand narrative compared to its other product categories. The decision to exit the watch market could be viewed as a calculated move to enhance the brand's overall image and perception of exclusivity.
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