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Investors welcome Burberry's corporate shake-up

By Don-Alvin Adegeest

12 Jul 2016

Fashion

Remember those images of the Burberry check being worn head-to-toe by those whom Burberry would rather you forget about?

The company has fought long and hard to keep its check the epitome of chic, and creative director Christopher Bailey has played a key role in transforming the brand from a staid British label to a leading luxury heritage brand.

While creatively Bailey has triumphed, it is fair to say he has stumbled taking on a dual role, also acting as the company's chief operating officer. There are those who say it is nigh on impossible to both design and steer a ship simultaneously. If we look at the figures, since Bailey's appointment as CEO in May 2014, shares in Burberry have dropped 22 percent.

Perhaps that is why Burberry's investors breathed a sigh of relief at the news that the British fashion company is to shake up its corporate structure and strengthen its operations with the appointment of Marco Gobbetti as its new chief.

Gobbetti, who joined from Celine, has over 30 years experience in the industry having also worked for luxury groups such as Bottega Veneta and Givenchy. He is expected to implement a cost-cutting programme, identify and reduce operational challenges and improve the way Burberry presents its product in stores. Mr Bailey in turn is expected to put a renewed focus on the creative side, making certain all of Burberry's product are the best they can be.

Bailey denied handing over the company's reigns

Mr Bailey denied he was handing over the reigns to a new chief, and will retain his old title as well as that of Burberry's President, a newly created role. Bailey told the Financial Times: "We are both the boss. We both go into the chairman of the board. We are true equal partners."

The Wall Street Journal noted the changes are the most dramatic at Burberry since longtime CEO Angela Ahrendts said on October 15, 2013 that she was leaving the fashion house to become Apple Inc.’s retail chief, sending shares down 7.6 percent that day. By contrast, on Monday, Burberry’s shares jumped 4.2 percent to close at 12.11 pounds, reflecting the mounting investor disquiet that has surrounded the 45-year-old Mr. Bailey’s two-pronged role.

Photo:Christopher Bailey on set, Burberry Facebook

BURBERRY
Christopher Bailey
Marco Gobetti