New chief executive for Burberry

LONDON • British luxury brand Burberry has recruited Mr Marco Gobbetti, the Italian boss of French brand Celine, to succeed Christopher Bailey as chief executive next year, freeing Bailey to focus again on the design role that made his name.

The appointment ends an experiment in which Burberry became the first publicly listed fashion company to let one person hold the roles of chief executive and creative director at once. The dual roles since May 2014 had worried investors who felt Bailey had too much on his plate.

Bailey, 45, accepted a 75 per cent pay cut less than a month ago, after a slowdown in sales, a fall in profit and a flurry of executive departures from the company.

He will stay at Burberry as president and chief creative officer and focus on products.

He appeared to struggle to deal with slowing demand from mainland China and Hong Kong, which account for around 40 per cent of Burberry's sales. Last month, his pay was cut after a disappointing year in which the company's share price tumbled by 38 per cent and pre-tax profit slipped by 7 per cent.

Shares in the 160-year-old company rose by up to 7.9 per cent, their strongest day in three years, after news of the change.

Exane BNP Paribas analyst Luca Solca said: "It was clear that the 'dual role' solution was not working and that both the business and the share price had suffered. This is a step forward for Burberry, where we perceived a need of reinvention and stronger direction."

The Paris attacks have deterred tourists and demand from major markets such as China has fallen, with global sales growth seen sinking this year.

Mr Gobbetti will be responsible for the commercial, operational and financial elements of the business, working with Bailey, who will oversee brand and design.

REUTERS, NEW YORK TIMES

A version of this article appeared in the print edition of The Straits Times on July 13, 2016, with the headline 'New chief executive for Burberry'. Print Edition | Subscribe