According to Asahi Shimbun's online magazine Webronza, the U.K. apparel maker Burberry has decided to end its long-standing licensing agreement with Japan's Sanyo Shokai in order to develop its own retail outlets in Japan. Sanyo first signed the agreement in 1965, and since then has made Burberry one of the most consistently successful foreign brands in Japan by tailoring the company's line to Japanese bodies and tastes. Though Burberry's famous tartan check pattern is at the heart of Japan's love for the brand — owning a Burberry scarf was, for a time, a rite of passage for Japanese high school girls— Sanyo's main achievement was making the Burberry trench coat a timeless fashion favorite.
In 2006, an American, Angela Ahrendts, became the CEO of Burberry and worked to return the company to its roots as a high-end brand. She downplayed the tartan check pattern, reducing its use to only 10 percent of the product line, and concentrated more on new, original designs. From 2006 to 2013, when Ahrendts left to become senior vice president of retail and online at Apple, the company doubled its sales revenues and tripled its stock price. One of Ahrendts' main concerns was doing away with all the licensing agreements the company had with regional companies. She bought out the Spanish franchise and opened directly owned stores in Spain that have become just as successful if not more so than the franchise business.
As it stands, of Burberry's ¥349 billion annual sales, only ¥18.5 billion comes from franchises, or 3 percent, but after Spain was cut loose, Japan accounts for 60 percent of all franchise business. Burberry obviously thinks it can make more money dealing directly with Japanese consumers, specifically high-end Japanese consumers, since an imported Burberry trench coat costs as much as ¥230,000, while the trench coats that Sanyo makes under its Black (men) and Blue (women) Burberry labels only cost half as much.