Marco Gobbetti Replaces Christopher Bailey as Burberry CEO
Marco Gobbetti Replaces Christopher Bailey as Burberry CEO
The news broke today that Marco Gobetti will replace Christopher Bailey as the CEO of Burberry, starting in 2017. Bailey, who held both the CEO and Chief Creative Officer titles, will remain with the company and maintain his creative position, as well as taking on the role of President. Burberry has also announced that Julie Brown, the current CFO at Smith and Nephew, has been appointed to the company’s new role of Chief Operating and Financial Officer, replacing the current Chief Financial Officer Carol Fairweather.
This change comes after several quarters of poor sales and financial reports, including a 35% fall in the company’s London-based stocks over the past year, and poor sales in the Chinese market, which accounts for about 40% of the company’s sales. Bailey himself took a 75% pay cut in June due to the company’s pre-tax profits slipping down 7%.
Regarding Gobetti, both Burberry and Bailey have offered optimistic support: “With more than 20 years’ experience in the luxury industry he has a proven track record for growing and developing brands including Givenchy, Moschino and Bottega Veneta,” said Burberry’s statement. “Most recently, at Céline, his retail and customer focused strategies have delivered exceptional growth for the brand over the last 8 years.”
“I am very excited that Marco Gobbetti is joining us as chief executive officer and as a partner to me,” said Bailey in a statement. “Marco brings incredible experience and skills in luxury and retail with him that will be invaluable to us… On a personal level, I know that we are going to enjoy a wonderfully collaborative partnership that makes me very excited for our future at Burberry.”
Burberry Chairman John Peace offered a clear insight into the workings behind the change in leadership, portraying Bailey as one of the key instigators to the change, rather than a pawn to be shifted, a conclusion so many seem keen to jump to. “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,” stated Peace. “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.”
Luca Solca, the Head of Luxury Goods at BNP Paribas, told Business of Fashion that while a positive move, this change in leadership will likely not provide immediate change to the business, and that patience is in order. “All in all, this is a step forward for Burberry, where we perceived a need of reinvention and stronger direction,” Solca stated. “The first issue to be tackled was to eliminate the joint role. This will be done in 2017. More could change further down the road. Clearly, Marco will have to prove himself in a much larger company than Celine (we estimate Celine to have had sales of €600 million in 2015), while Julie will have to make her experience relevant and credible in a very different industry. Investors should be aware, of course, that likely disappointing underlying performance in 2016 could moderate short term enthusiasm on the share price – and that we will have to wait a few quarters before the impacts of the new leadership translate in the business.”
Marco Gobbetti Replaces Christopher Bailey as Burberry CEO
