Burberry blazes a pink trail

THE great ambition among British upmarket retailers these days is to do a Burberry. You take an old-fashioned British brand, inject it with some design razzmatazz - and bingo, you have a success story.

If only it were as easy as that. But one suspects Belinda Earl is going to find out at Jaeger that it is far more complicated.

Burberry's great success under Rose Marie Bravo, the best rewarded woman in British business, is that she proceeds cautiously.

The radical chic of Burberry stores, from Berlin to Tokyo, has been built around its traditional strengths of quality and outerwear. It is on this base that flair, design, colour and fashion have been added. As a result, it has become one of the most desirable luxury brands in the world.

With the opening of new frontiers to riches, from Moscow to Beijing, Burberry has been quick to cash in. But it is careful to partner local companies and share the very generous margins, rather than take on too much of the risk itself.

The formula, which delivered a big advance in profits this year and a 50% lift in the dividend, was based around pink and pastels, a far cry from the dull but staple fawn Burberry check-lined raincoat.

Somehow Bravo and her team have convinced the fashionable that they need not just one Burberry coat, but several in different colours, and some coatstyle dresses to complete the ensemble. The careful branding has also been usefully passed down through accessories from umbrellas, delicately decorated with flowers, to perfumes.

Menswear has been a little more tricky but is starting to get the Bravo makeover with the launch of Burberry Brit for men. One of the advantages that Burberry has over its rivals is that it still sources heavily in Britain, with some work done in Italy, which provides consumers with a traditional assurance of quality.

The capital spend will continue at £ 40m to £ 50m in the next financial year, demonstrating a belief in the long term by the Burberry board and its main shareholder GUS.

In any fashion business maintaining momentum, after a splendid year, is difficult. Bravo appears as confident as ever, even introducing the cropped trench coat for the new global warming age. Who knows what the next trick will be?

Caz choice

ONE institution having difficulty adapting to modern times is blueblooded stockbroker Cazenove. The 180-year- old broker, which represents many of Britain's top Footsie companies, is struggling since it converted from partnership to corporation.

The change was seen as essential-so that it could properly pay its staff. But as an investment bank it is struggling to make waves.

The advice of chairman David Mayhew, 64, is still sought in the City on critical transactions. In fact, Caz was the first financial institution to show Conrad Black the door after it felt it had been let down over a share placement.

But in the world of the bulgebracket investment banks, Caz is a minnow. The choices it faces are to go ahead with an independent float, valuing it at £800m or so, or to sell itself to one of the big boys.

The history of merchant banks taken over by international giants is not a happy one. After the initial burst of enthusiasm the accountants, compliance officers and marketing men eventually get the better of the enterprise and the culture is quickly gobbled up.

That is certainly the case for a range of great British financial names from Flemings to Kleinwort Benson.

Can Cazenove survive as a free- standing broker? There is no reason why not. Other less illustrious names like Close Brothers have done precisely that.

In the case of Close, the trick has been to run its businesses as separate independent enterprises and not to be tempted into believing that clients of, say Winterflood, its broking arm, are necessarily going to be corporate advice customers.

Independence is a far more attractive option than subservience.

Vanishing reserves

CAN anyone be sure of Shell? The blue-chip oil giant has been forced to cut its oil reserve levels for the fourth time this year as it has come under pressure from regulators and auditors to clean up its accounts.

As a result, the company has had to jettison several key executives, including former chairman Sir Phil Watts, has lost its 'triple A' topgrade investment rating, and suffered enormous reputational damage.

If it wants to salvage its reputation, it has no time to lose in unifying and streamlining its British and Dutch boards.