And so ends the Christopher Bailey as Chief Executive Officer and Chief Creative Officer era. The 160-year old British design brand announced on Monday that Marco Gobbetti is leaving Céline, where he has held the position of CEO for roughly eight years, to join as CEO; he will begin his tenure next year, once his LVMH-imposed non-compete agreement is complete. While Bailey is being stripped of his CEO title, he will continue in his role as chief creative and will also take on the title of President.
Gobetti's appointment is not a surprising one given Burberry’s very public recent struggles. In making the changes, Burberry is acknowledging the difficulty of being a details-driven CEO, while simultaneously handling the creative sweep of designing. In his dual role, Bailey had struggled to contend with subdued luxury demand from Paris to Hong Kong as he sought to reverse declining profit. Since Bailey took on the dual CEO and chief creative role at Burberry two years ago, replacing Angela Ahrendts, when she left for Apple, the brand has been in swift decline. Early last month, Bailey, who has been grappling with subdued luxury demand and falling profits as he tries to cut costs and lift sales, suffered a 75% pay cut after profits fell at the London-based luxury fashion house. The announcement came on the heels of prolonged criticism from Burberry shareholders over Bailey’s dual role in the group, with some warning that tensions may come to a head at next month’s annual meeting.
After a year in which Burberry’s shares have fallen 36 per cent, at least two large investors revealed earlier this year that they were considering a vote against the re-election of Bailey as chief creative and chief executive officer — although they say such a move would be a last resort. “It was always a brave decision to give him the dual role and it is not clear that it is working out,” one top 20 shareholder told the Financial Times in May. Another said: Burberry is “in a situation where it does not look feasible for the chief executive to also be the chief creative person, too. They should let Bailey do what he does best, which is design. They need to make sure they use the real skills that he has. It feels like he has been overstretched in both positions.”
Prior to joining Céline, Gobbetti, 57, was CEO of Moschino since 1993 and joined LVMH’s Givenchy as CEO in 2004.
In related news, Burberry has named Julie Brown, chief financial officer of global medical technology business Smith and Nephew PLC, as its new chief operating and financial officer. Smith and Nephew said the search for a successor is under way. Carol Fairweather, who currently holds this role, is leaving Burberry.