Dive Brief:
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Christopher Bailey is stepping down from his chief executive position at fashion house Burberry, shifting to the role of president and chief creative officer, the company said Monday. Bailey previously held both the CEO and CCO roles.
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Marco Gobbetti, chairman and CEO of French luxury brand Céline, has been appointed Burberry's new CEO.
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Burberry also named Julie Brown, CFO at global medical technology business Smith and Nephew, to the new role of chief operating and financial officer.
Dive Insight:
Burberry characterized the executive shakeup as part of an ongoing business review targeting growth opportunities in retail, product and digital. But many analysts have been calling for Burberry to appoint a more experienced executive to assist Bailey as the retailer struggles with a challenging luxury retail environment.
That's now happening, although Burberry chairman Sir John Peace said the move was driven by Bailey himself.
“Since taking on the combined role of Chief Executive and Chief Creative Officer, Christopher Bailey has done an excellent job set against a backdrop of challenging market conditions,” Peace said in a statement. “The review that he has led into our ways of working is the blueprint for the next phase of Burberry's evolution. In order to maximise our ability to successfully implement these plans, Christopher identified the need for a new Chief Executive for the business who could partner with him as we execute on the new strategies and I am excited to see what they will do together.”
Last month, Burberry announced that Bailey would receive a 75% cut in compensation for this year, earning £1.89 million ($2.74 million) in fiscal 2016 from £7.51 million a year ago. Burberry also cut other executives’ performance-based bonus payouts because profit targets were missed: Revenue fell 1% and pretax profit fell 10% in 2015, in large part because its fortunes have been closely tied to sales in China, and because the strong dollar has hurt luxury retailers especially hard.
Several analysts hailed the move to ease Bailey’s workload, the New York Times notes. “Burberry seemed stuck with a less-than-ideal senior management structure,” Luca Solca, a luxury analyst at Exane BNP Paribas, wrote in a note to investors. "It was clear that the ‘dual role’ experiment was not working, and that both the business and the share price had suffered. This is a step forward for Burberry.”
