Burberry's Christopher Bailey Replaced as CEO by Marco Gobbetti -- Update
July 11 2016 - 10:10AM
Dow Jones News
By Saabira Chaudhuri
Burberry Group PLC has named luxury veteran Marco Gobbetti as
its new chief executive, replacing Christopher Bailey who has
attracted strong criticism during his two-year tenure as the
British fashion label's CEO and creative head.
The company is also replacing its Chief Financial Officer Carol
Fairweather, who has worked closely with Mr. Bailey since he became
CEO in May 2014, with the CFO of global medical technology business
Smith and Nephew PLC, Julie Brown. Smith and Nephew said the search
for a new CFO is under way.
Burberry's surprise announcement--which comes after investors
have for months groused that the 45-year-old Mr. Bailey was
ill-equipped to juggle the dual roles of CEO and creative head of a
company Burberry's size--sent shares up 6.4% in afternoon trading
in London to GBP12.36.
Mr. Gobbetti is the CEO and Chairman of Céline, the influential
LVMH-owned fashion and accessories brand. He will begin as
Burberry's CEO starting next year, although Burberry didn't give an
exact date.
Mr. Gobbetti has worked in luxury for the past 20 years on
brands such as Givenchy, Moschino and Bottega Veneta. His
appointment comes as Burberry has seen sales hammered in key
markets such as Greater China and the U.S. for a string of
quarters, with little respite. The company's shares have dropped
22% since Mr. Bailey replaced longtime CEO Angela Ahrendts at the
helm.
Mr. Bailey--who has been demoted to Burberry's president and
chief creative officer--recently announced a cost-cutting program
and a share buyback but the moves did little to quell disquiet
about the company's long-term prospects.
Burberry has a large store footprint in China where sales have
been hit by an anticorruption drive, and in Hong Kong where sales
have fallen following unfriendly visa policies that have
discouraged visitors from mainland China.
Relative to peers such as LVMH Moët Hennessy Louis Vuitton SE
and Prada SpA, Burberry is underrepresented in Europe and Japan,
which have seen an influx of Chinese shoppers.
The company last month said Mr. Bailey had received a 75% pay
cut for fiscal 2016, following a year in which the trench-coat
maker reported an 8% fall in full-year profit.
Monday's arrangement, should it last, is something of a coup for
Burberry since Mr. Bailey--who has been with the company since
2001--is widely known as being the face of the brand and losing him
entirely would have been a significant blow for the British trench
coat maker.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
July 11, 2016 09:55 ET (13:55 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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