Burberry has announced a start date for its new chief executive officer, six months after announcing it was hiring Marco Gobbetti to take on the role. The former CEO of LVMH Moët Hennessy Louis Vuitton-owned Céline will join the London-based fashion house later this month as executive chairman of Asia Pacific and the Middle East before formally taking the reins on July 5, the London-based company said in a statement Monday.
Burberry appointed Gobbetti – who has also held the CEO role at Moschino from 1993 to 2004, and then Givenchy – as its new chief in July to succeed Christopher Bailey, who will return to overseeing Burberry’s creative direction after a two-year stint in charge during which he presided over falling profits and slumping shares. Bailey was reportedly ousted from the CEO following a vote from the 160-year old brand’s board members.
According to reports, at least two large investors revealed in early 2016 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.”
Given the lack of sales growth during Bailey’s tenure as CEO, Gobetti’s appointment was not a surprising one. In stripping Bailey of the CEO title, Burberry is acknowledging the difficulty of a single individual inhabiting the dual role of creative director and CEO, something fashion is most accustomed to seeing separated in two firmly separated jobs (think: Frida Giannini and Patrizio di Marco at Gucci and now Alessandro Michele and Marco Bizzarri; Marc Jacobs and Robert Duffy; Raf Simons and Sidney Toledano at Chirtsian Dior; YSL and Pierre Bergé, etc.).
In this two-for-one 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.
In June 2016, Bailey, who had been grappling with subdued luxury demand and falling profits as he tried 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.
The company said in July that Gobbetti would join as soon as he would be contractually able to do so – meaning that he was subject to a non-compete clause (common contractual provisions entered into between two parties either upon contract signing or at the end of a business relationship, in which one party agrees not to compete with the other for a set period of time) in connection with his former role at Céline that prevented him from working for a competing brand for a set duration of time (roughly 6 months, it seems).