Burberry is a leading luxury brand which designs, sources, manufactures and markets luxury clothing and accessories globally. The company operates 174 stores, but also has 56 franchise stores along with outlets and concessions worldwide which corresponds to 64% of revenue, while 29% of revenue is earned through wholesaling. The company is focusing its growth on underpenetrated and growing luxury markets like the US, China, India and the Middle with new store FY2012 Capex of £70-90m. The company already has stores in 30 Chinese cities. The company’s expansion strategy is based on licensing and franchising stores in riskier markets, and once the stores have become successful Burberry acquires these back from the franchise partners which reduces risk for the company. Burberry has upgraded its IT system to optimize and globalize operations and to streamline digital media to promote customer experience which should help strengthen the brand. Given the discretionary nature of Burberry’s sales, the company faces significant risks from a global economic slowdown.