Burberry is trying to turn its business around and, as such, has named a new CEO in effect demoting Christopher Bailey, who has come under criticism for leading the luxury brand astray.
Marco Gobbetti, chairman and chief of LVMH-owned Celine, will assume the chief executive role at Burberry next year while existing CEO Christopher Bailey steps aside into a newly created role as president—in addition to his position as chief creative officer—and will oversee brand and design, working alongside Gobbetti.
Burberry said the moves are part of its ongoing business review targeting future growth opportunities at retail, with product and in digital that will enable changes in the way the company works.
“I am very excited that Marco Gobbetti is joining us as chief executive officer and as a partner to me,” Bailey said 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.”
Both Gobbetti and Bailey will report to Burberry chairman John Peace, who said he believes Gobbetti will be able to help the company deliver “long-term sustainable growth” and “sector outperformance” over time.
“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. “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 maximize 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.”
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Gobbetti has been with French brand Celine since 2008 and in the industry for more than 20 years, holding previous roles as CEO at Givenchy and Moschino.
The company also said its chief operating officer, John Smith, will leave the company to “pursue other interests,” and that Julie Brown, currently the chief financial officer at medical technology business Smith and Nephew will take on the new role of chief operating and financial officer in early 2017 at the latest.
Burberry’s business has struggled in recent years with sales slumps in Greater China and the U.S. over multiple quarters.
In its preliminary results for the year ended Mar. 31, Burberry reported sales down 1 percent (though up 3 percent excluding Hong Kong and Macau), and adjusted profit before tax down 35 million pounds ($45.4 million), or 10 percent over the prior year to 421 million pounds ($546.5 million).
Many have attributed the lackluster results to Bailey’s inability to sufficiently run the business.
Burberry shares jumped as much as 6 percent in early trading Monday, then started to level off, up around 4.3% at publication time.