Not One Burberry Trench Coat in the Boardroom

For a few years in the early 2000s, some venues in Britain turned away customers wearing the Burberry check, the beige pattern with black, white and red stripes that had lined the trench coats of officers and film stars for most of a century. A luxury brand had become, between 2001 and 2005, the uniform of a subculture the tabloids mocked, and the doormen were only enforcing what the market had already decided. Nobody at the company had chosen this. They had merely said yes, many times.

The yeses had a shape. Twenty-three licensees around the world, each doing something different with the same pattern, caps, miniskirts, whatever sold fast, plus counterfeits in quantities the originals could not match. Every license had brought a cheque and taken a little of the meaning, and by the time Angela Ahrendts took over as chief executive, in July 2006, the company was growing at two percent a year in an industry growing much faster, and nobody inside could say what it sold.

Then came the detail I find more telling than the doormen. At her first strategy meeting, on a damp grey London day, Ahrendts looked around the table and noticed that not one of her executives was wearing a Burberry trench coat. The people running the most British luxury brand in the world no longer wore it. Outside, everyone did.

The rescue did not start in the design studio. It started with lawyers. The fragrance and beauty licenses were taken back in-house, the Spanish franchise, worth a fifth of group revenues, was bought out, and the check was pulled from almost everything until it remained on no more than a tenth of the products. Then, with the designer Christopher Bailey, the company returned to the one thing it had that nobody else did, the trench coat. A brand that had come to be about anything became, expensively and patiently, about one thing again.

A license is a yes that works without you, and the mechanism repeats at every size. You sign once, you take the money, and from then on somebody else decides, every day, what goes out into the world under your name, and that somebody minds his own sales, which is perfectly reasonable from where he sits, since your name concerns him only as long as it sells. No licensee has any motive to stop before the sign is used up, and why would he spare something that belongs to someone else.

And taking it back has a price few people say out loud. The no you declined to say at signing is merely postponed, and it is bought back years later at many times the cost, with lawyers, with franchises that made a fifth of your revenue, with years in which the company spends money in order to become smaller. This is plain bookkeeping. A yes brings money today and creates a debt with no written due date, and the debt is paid by whoever comes next, usually with interest.

Which brings me back to the coats. When the people inside stop wearing the brand, the signal goes well beyond the wardrobe and says they no longer believe in what it has come to mean, and a brand its own makers no longer believe in has nobody left to defend it when the next license is proposed. Ahrendts did not begin with customers. She began with the table in the meeting room, and only after the people around it had put the trench coat back on did it make sense to ask what the world outside saw.

Outside luxury, the license goes by friendlier names. The partner who resells your service under your name and delivers it as best he can, the agency that posts as you without asking anymore, the distributor who puts your logo next to whatever else is in stock. Each of them got a yes at some point, each works without you, and none has a reason to stop before your name is used up.

Before you sign the next partnership, look at what you have already signed. What did your company lend its name to this year, and who watches what goes out under it? And do your own people still wear the brand, literally or otherwise, or did they leave it on the hook in the hallway? I will ask you for one thing. Settle the rule by which your name may be lent before the next proposal arrives, because at Burberry that rule was written after twenty-three licensees and cost a fifth of the company.