Industry // Is Burberry Merging with Coach?

Waking up to hear Burberry may be merging with Coach was not something I had expected to hear. Although this may help Burberry initially, with profits rising by as much as 4.8% and sales up 7%, I believe that as one of the few heritage brands left that England has to offer on the luxury front, this would absolutely not be the right move for Burberry or Coach. 
It could be said that some benefits may lay in the fact that Burberry is mostly concentrated in the UK and European region, while Coach is looking to make a presence in these areas. Burberry's merchandise is priced at a higher level than that of coach, and coach's strong networks in the US, and so there could perhaps be beneficial points for the merge. However, I don't believe that these benefits would be true for either company. 

"A more aggressive commercial strategy could be that of running Burberry harder - the 'American way,'" Solca continued. "As promising as this looks short-term, this would increase the risk of future brand trivialisation and compromise long-term growth and valuation multiples. 

Burberry is a British brand and sells itself as this, merging with what may be a similar label in age but one that hits a lower market level would only hinder the British line. At a time when both companies are financially stable, and with past mergers in luxury brands showing compromised long-term growth, this seems a highly unnecessary move if true. Burberry may need some rearranging but this merge would not make any improvements to either companies, and neither could be of any benefit to the other.


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