Monday (July 11), Burberry announced that Christopher Bailey, who has served as both CEO and chief creative officer of the brand since 2014, will be replaced as CEO. Marco Gobbetti, currently CEO of LVMH’s Céline, will take over the role at Burberry in 2017. Bailey will stay on as chief creative officer and president.
Burberry shares jumped at the news. Since Bailey’s appointment as CEO, he has attracted criticism—largely for his generous compensation, which was cut 75% in 2015. Burberry’s sales in China have also suffered; The Wall Street Journal notes that shares have fallen 22% since Bailey was named to succeed Angela Ahrendts as CEO in 2013. (Ahrendts held the position from 2006, and named Bailey chief creative officer in 2009.)
Taking a longer view, much of Burberry’s revival over the last decade can be attributed to the creative talent of Bailey, who has been with the brand since 2001.
Before Bailey became creative director, Burberry (established in 1856) was seen as the purveyor of drab trenches and umbrellas. Thanks to knockoffs, the brand’s signature camel, black, and red check had lost its luxe patina, a problem also encountered by Gucci, whose interlocking G monogram battled imitations before Tom Ford took over as its creative head.
Bailey, who cut his teeth at Gucci during the Ford years, breathed new life into Burberry. He made its dresses, suits, and scarves covetable for a new generation of shoppers. He also turned Burberry into a digital pioneer in the age of e-commerce, selling directly to consumers straight from the catwalk and showing “seasonless” men’s and women’s collections together. Shedding his CEO duties should free Bailey to focus on his creative duties and brand development—a big enough job alone.
Meanwhile, the brand is also getting a boost from Brexit. The weak British pound means it’s a great time for tourists in the UK to stock up on brands like Burberry. Analysts are predicting a 10% boost in profits for Burberry, which will report quarterly earnings on Wednesday (July 13).