Tag: Burberry Black Label

Burberry Japan – the start of a relationship: Sanyo Shokai started importing Burberry coats to Japan in 1965, and in 1970 partnered with trading company Mitsui to design, make and sell apparel, coats, suits and other fashion items under the Burberry brand under license from the London based Burberry company. According to trade sources, Mitsui licensed the Burberry brand from Burberry, and Mitsui then sub-licensed to Sanyo Shokai.

A brand-disconnect was created between Burberry-Japan and the rest of the world of Burberry, which by Burberry, and fashion world insiders was considered as the “Burberry Japan problem”. However, the “Japan problem” yielded excellent sales and profits for Sanyo Shokai, and excellent license/royalty fee payments from Sanyo Shokai to Burberry, which made it hard for Burberry to consider other options in Japan.

Starting with the appointment of Rose Marie Bravo in 1997, who hired creative director Roberto Menichetti, Burberry changed the brand strategy, aiming to transform Burberry from a premium apparel brand to a luxury brand. Burberry’s Japan business became a problem in this transformation, since Burberry’s Japan business was not Burberry’s business at all, but Sanyo Shokai’s, and therefore was independently run by Sanyo Shokai with its own Japan-only products and sub-brands Burberry Blue Label and Burberry Black Label.

Burberry decided to carry out the transformation from the indirect license model, to the direct business model in Japan. Burberry’s license to Sanyo Shokai was meant to expire in 2020, but Burberry brought the termination of the license contract forward to June 2015.

Burberry’s challenge is now to build a different luxury Burberry business in Japan under the same brand name, while Sanyo Shokai’s challenge is to manage the pivot from the Burberry brand to the Mackintosh London brand as smoothly as possible: to move as many customers directly over from the Burberry brand to the Mackintosh brand and other brands used by Sanyo Shokai. Sanyo Shokai has the advantage that Sanyo Shokai keep almost all the former Burberry store locations and refurbishes them over summer 2015 into Macintosh and other Sanyo Shokai stores.

Burberry had to give up the 300-500 Burberry branded stores in Japan which it had no direct control over, most of which Sanyo Shokai will now transform into Mackintosh London and Mackintosh Philosophy stores. In addition, Sanyo Shokai will develop two sub-brands following on from Burberry Blue Label and Burberry Black Label, now under the “Crestbridge” brand:

• Mackintosh London
• Mackintosh Philosophy
• Blue Label Crestbridge 
• Black Label Crestbridge 

Sanyo Shokai has until June 2016 to sell its existing Burberry licensed products.

Why did Burberry and Sanyo-Shokai not decide on a less disruptive split? Read our analysis here.

With the expiry of the license agreement with Sanyo Shokai and Mitsui Trading company, Burberry operates the Burberry business in Japan direct. There is an approx. 1 year transition period where Sanyo Shokai seems to be permitted to sell remaining stocks which are still left from the validity period of the license

Burberry is now building business in Japan both via its new flagship store in Tokyo Omotesando, other direct stores and indirect stores, and Burberry is also building direct online business via the internet and mobile phones/smartphones.

While the apparel license was terminated in June 2015, on 18 November 2008, Burberry, Sanyo Shokai and Mitsui entered into a luxury non-apparel joint venture for Japan operational for the Spring/Summer season 2010.

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Burberry was founded by Thomas Burberry, designer of the famous Burberry trench coat in 1856 in London.

Today Burberry Group plc is a public company, traded on the London Stock Exchange:

• Annual revenues: UKL 2.523 billion (US$ 10.4 billion) (year to March 31, 2015)
• Annual net income: UKL 341.1 million (US$ 531 million) (year to March 31, 2015)
• Market Cap: UKL 6.67 billion (US$ 10.4 billion) (August 18, 2015)

Burberry Blue Label was a sub-brand developed by Sanyo Shokai for women. Currently Burberry Blue Label products are traded online second-hand in Japan, and Sanyo Shokai is continuing the Blue Label Brand without the “Burberry” brand.

With the termination of the Burberry license, Sanyo Shokai pivoted this sub-brand to Blue Label Crestbridge.

Blue Label Crestbridge is:

• Contemporary British
• Progressive Preppy
• Cute essence
• Fine quality
• Japan x British. British fashion born in Japan

Creative Director is: Yasuhiro Mihara (三原 康裕)

Burberry Black Label was a sub-brand developed by Sanyo Shokai for men. Currently Burberry Black Label products are traded online second-hand in Japan, and Sanyo Shokai is continuing the Black Label Brand without the “Burberry” brand.

With the termination of the Burberry license, Sanyo Shokai pivoted this sub-brand to Black Label Crestbridge .

Black Label Crestbridge is:

• Contemporary British
• British trad
• Clean
• Catchy & humour
• Fine quality
• Japan x British. British Fashion born in Japan

Creative Director is: Yasuhiro Mihara (三原 康裕)

The Mackintosh is a waterproof raincoat made of rubberized fabric invented by Charles Macintosh and first sold in 1824 (note that the inventor is named Macintosh, while his invention is today known as Mackintosh, with an added “k”).

The company was founded in Glasgow, Scotland around 1846. The company went through ups and downs, management buy-outs, and in the 1970s was mainly producing uniforms for British Rail and the London Metropolitan Police. British Rail and the Police procurement were looking for cheaper options, so Mackintosh had to reinvent its business leading to the reinvention of Mackintosh as a fashion brand.

In 2007 the Osaka firm Yagi Tsusho (八木通商株式会社) acquired the company and the brand Mackintosh, and created a new flagship store in Mount Street in London’s Mayfair.

The Mackintosh brand as a fashion label was created via Japan, as described by The Scotsman.

Sanyo Shokai reached a licensing and business development partnership with Yagi Tsusho (八木通商株式会社)  regarding the Mackintosh London brand.

Sanyo Shokai’s strategy is to replace the lost Burberry license by the Mackintosh London brand. Sanyo Shokai opened the first Mackintosh London store in Yokohama in July 2015, and plans to open 263 Mackintosh London stores in Japan.

Sanyo Shokai plans a price range of YEN 120,000 – 160,000 for coats and suits. Most Mackintosh London stores will be Sanyo Shokai stores, which were operating under the Burberry brand previously, continuing business at the same locations with the same staff, converting from the Burberry to the Mackintosh brand identity, including the luxury floors in the main Japanese department stores. Sanyo Shokai plans to have converted approx. 170 stores in summer 2015.

Sanyo Shokai is now developing two sub-brands:

• Mackintosh London
• Mackintosh Philosophy

Sanyo Shokai (株式会社三陽商会) was founded on May 11, 1943, and after an IPO in July 1971 is traded on the Tokyo Stock Exchange, Code 8011. Sanyo Shokai employs about 1300 people.

• Annual revenues: YEN 109 billion (US$ 0.9 billion) (year to Dec 31, 2014)
• Annual net income: YEN 6.4 billion (US$ 51 million) (year to Dec 31, 2014)
• Market Cap: YEN 54 billion (US$ 0.4 billion) (August 18, 2015)

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Yagi Tsusho (八木通商株式会社) was founded on December 21, 1946 and is a trading, marketing and merchandizing company based in Osaka. 

In 2007 Yagi Tsusho acquired the Scottish company Mackintosh.

Yagi Tsusho employs about 200 people.

• Annual revenues: Annual revenues: YEN 38.8 billion (US$ 312 million) (year to March 31, 2015)

Why did Burberry and Sanyo-Shokai not decide on a less disruptive split? Read our analysis here.

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