Sanyo Shokai expects business expansion despite Burberry shutdown, strengthening existing brands with 20 billion yen reduction

May 19, 2014

Sanyo Shokai announced at a press conference on May 19th that, regarding the licensing agreement for the "Burberry" brand with UK-based Burberry Limited, which it is conducting jointly with Mitsui & Co., the "Burberry London" women's and men's clothing business will end at the end of the Spring/Summer 2015 season, and the Burberry children's clothing business will be transferred to the Burberry Group after the Spring/Summer 2015 season. The press conference was attended by Representative Director and President Masahiko Sugiura, Representative Director and Executive Vice President Fumitaka Koyama, Director and Chief Accounting Officer Kaoru Matsuura, and Director and Chief Corporate Officer Isao Iwata. It was explained that the two companies have agreed to continue the "Burberry Blue Label" and "Burberry Black Label" businesses currently operated by Sanyo Shokai under the new sub-brand names "Blue Label" and "Black Label" from the Fall/Winter 2015 season, preserving the current brand concepts. "Until now, the Burberry brand has been subject to certain restrictions, but now we can expand our range of miscellaneous items and enable online sales, which was previously prohibited. This expansion and increased freedom in our sales channels will enable us to anticipate business expansion," said Koyama. Furthermore, in response to the anticipated decline in sales following the closure of the Burberry business, one of Sanyo Shokai's core businesses, the company formulated and announced a five-year mid-term management plan (2014-2018) outlining the need for fundamental business restructuring. The company's three future management guidelines are to establish a profit base by actively investing in its three core businesses (MACKINTOSH LONDON, Paul Stuart, and EPOCA) and four secondary businesses (AMACA, EVEX by KRIZIA, TO BE CHIC, and LOVELESS), to expand its original brand business, and to acquire new sales channels through M&A. "We expect advance sales to decline from 138 billion to 119 billion yen between 2014 and 2017, but we hope to recover to 130 billion yen by 2018," Iwata explained. President Sugiura commented, "The Burberry name is a great name, and Sanyo Shokai has been supported and nurtured by Burberry. During that time, we have developed solid manufacturing expertise, so we believe we are ready to stand on our own, and I am confident that this will be an opportunity for further growth. From now on, we will devote all our efforts to introducing Mackintosh London to our clients as our largest umbrella." Vice President Koyama added, "We have been searching for a win-win solution for the Burberry Group's global strategy and Sanyo Shokai's strategy for five years since the contract shortening announcement was made in 2009, and we feel we have reached a good conclusion. Since 2015, we have signed a three-year contract for the Blue Label and Black Label brands, which will no longer carry the Burberry name, and we have a story plan to try them out for three years."

In addition, they stated that the current Burberry sales areas in department stores will be utilized for other brands, that Burberry Group's London Line stores will be located on the import/luxury floor separate from Sanyo Shokai's sales areas, and that staff reductions as a result of the recent restructuring are not part of the plan.

Burberry began importing and selling coats in 1965, and in 1970 Sanyo Shokai began its licensing business as a sublicensee of Mitsui & Co., which became the master licensee. In 1980, the two companies signed a 20-year contract as joint licensees, and since then Burberry's business in Japan has expanded significantly. It can be said that Sanyo Shokai has been instrumental in establishing the Burberry brand's position in Japan for nearly half a century.
奥麻里奈
  • Sanyo Shokai expects business expansion despite Burberry's closure, strengthening existing brands with a 20 billion yen reduction
  • Sanyo Shokai expects business expansion despite Burberry shutdown, strengthening existing brands with 20 billion yen reduction
  • Sanyo Shokai expects business expansion despite Burberry's closure, strengthening existing brands with a 20 billion yen reduction
  • Sanyo Shokai expects business expansion despite Burberry shutdown, strengthening existing brands with 20 billion yen reduction
  • Sanyo Shokai expects business expansion despite Burberry shutdown, strengthening existing brands with 20 billion yen reduction
  • Sanyo Shokai expects business expansion despite Burberry shutdown, strengthening existing brands with 20 billion yen reduction
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