Burberry Buys Italian Leather-Goods Factory as CEO Aims at Bags

(Bloomberg) -- Burberry Group Plc will acquire an Italian leather-goods factory as the company works to ramp up its business in luxury handbags under Chief Executive Officer Marco Gobbetti.

The factory will become a “center of excellence for Burberry’s leather goods,” creating prototypes and coordinating accessory production with external suppliers, Gobbetti said in a statement. “This will give us greater control over quality, cost, delivery and sustainability of our leather goods.”

The division being acquired from Italian leather-goods company CF&P Srl for an undisclosed sum has around 100 employees, a Burberry spokesman said.

Luxury companies including Moncler SpA and Kering’s Saint Laurent and Gucci brands have been investing in factories to bring more product development and quality control in-house. As well-heeled shoppers increasingly demand new designs -- but are unwilling to wait months for a runway bag to make it to stores -- owning manufacturing centers is helping luxury brands improve their speed to market.

Gobbetti has said that leather goods will be a key area for Burberry to develop as it targets a more luxurious brand positioning. Last year, the company hired designer Sabrina Bonesi, former accessories director at LVMH’s Christian Dior, to revamp the brand’s accessories offer. Chief Creative Officer Riccardo Tisci, the social-media-savvy former designer of Givenchy, will show his first collection for Burberry in September.

Jefferies analyst Flavio Cereda called the move a “positive” in a note after Italian newspaper Corriere della Sera first reported the deal. “The group’s messy supply chain is an area of concern and moves to redress this are welcome,” he said.

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