Luxury brands to switch to Direct era to recover the market power of attorney

    REVIEW: the Burberry is  a luxury brand, a large scale in China Start Direct mode. July 17, announced that the UK's largest luxury goods retailer Burberry Burberry will be £ 70 million acquisition of the franchise partner Kwok Hang Holdings is located in mainland China franchise stores. 

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       Currently, Burberry has 50 franchise stores in 30 cities in the Mainland. According to its 2010-2011 fiscal year plan, Burberry in the fiscal year to open 10 new stores, all Direct.   "Break doors," "burning bridges" under the pressure of public opinion, the agents shouted "survival crisis" move does not make a change of heart of all major brands of luxury brands. "Burberry are no longer willing to share the profits with others." 19, a luxury agent said. Last year, his agent before another international brand transformation Direct.

  Kwok Hang Holdings of Hong Kong's senior brand agents, its agents sell products across many types of jewelry, watches, clothing and other goods. Burberry Chief Financial Officer Stacey Cartwright said in a telephone, this is not an easy negotiation, and spent a very long time to find a consensus. Since the original shops and brand by Kwok Hang Holdings and Burberry, so the shop is the focus of negotiations.
        Under the new cooperation agreement, Burberry will invest £ 70 million cash acquisition Kwok Hang Holdings 50 stores in the Mainland and the company's 85% stake. Expected that all transactions will be completed in the fall. Future, Burberry will be fully responsible for the management of the stores in the Mainland. "Increase the intensity to shop in the future to accelerate the development of the online shopping market, now the Chinese market is an in-depth development opportunity." The Burberry chief executive officer the Ahrendts so interpretation of Burberry's future in the Chinese market.

  Direct the times

  Constantly high level of enthusiasm and expectations of the Chinese luxury goods market worldwide. In May of this year, the Chinese Academy of Social Sciences, said that in the next five years, China's luxury market will be worth $ 14.6 billion, the highest in the world. U.S. Boston Consulting Group is expected after 5 to 7 years, China will account for the global luxury market share of 29%.
        An international brand dealers said. Spending power in this market continue to release thoroughly brands on the market has come to an end, which is why so many brands to kick off the agent's reasons.

  Luxury brands often find an agent open proxy distribution rights in the shape of the size of the market to recover. To Burberry that it is the Indian market and actively looking for partners to take the franchise or joint venture to develop the market, this is the original Burberry first arrived in the Chinese market practice

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   Dealer sales channels too strong brands will gradually lose control, derived from the many gray areas. Therefore, the Forum of any luxury brand, each brand are concerned about the control agents.
        "As for another reason, that is, profits above brand dealer said," between the brand and agents are pro-rata share of profits, since it has been free to open up markets, why soup bowl and then distributed to others it? "
        As of December 2009, the fiscal year 2009-2010, Kwok, the Hang Holdings, the mainland of China franchise revenue of £ 75,000,000, profit of 14 million pounds. Cartwright did not disclose the profit-sharing ratio, she stressed that only profits in China each year are based on double-digit growth.