LONDON — Burberry shares closed on a high Monday after the company revealed that Christopher Bailey would be flanked by two new generals: Marco Gobbetti as chief executive officer and Julie Brown in the new, dual role of chief operating and financial officer.
Bailey, who has held the dual role of chief creative and ceo since May 2014, will retain his creative title and take on the new one of president.
Shares in Burberry, which in May unveiled a new, overarching strategy and cost-cutting plan, closed up 4.2 percent to 12.11 pounds, or $15.68, at current exchange.
Bailey’s double role had raised a few eyebrows among the financial community, and it was widely reported earlier this year that he would name a senior manager to help him.
Asked about the reasoning behind the new appointments, Bailey told WWD: “It’s what’s best for the brand in the long term. This company is very, very important to me professionally and personally.
“I knew that we needed to evolve our organization, our structure, the ways of working, the processes. I knew that I needed to bring somebody in to partner with me because there’s a lot of change going on — in the macro, our industry, and also in the company. I just took the process in a very, very thoughtful way.”
Monday’s announcement came two months after Bailey laid out a major strategic overhaul and promised that management changes would come in due course. Last month, John Smith, Burberry’s chief operating officer, announced he was leaving the company, and WWD reported that Bailey was looking into creating a hybrid role and hiring someone with operational experience to replace him.
Bailey said he’s never worked before with Gobbetti, but admires him and how he has operated alongside creative director Phoebe Philo to build the Céline brand.
“We just have complementary skills and certainly a shared vision. He just has an innate sense of getting a creative vision into a global store environment,” Bailey said.
“I love technology and digital and he’s a real expert in physical retail stores. He’s also a very lovely gentleman.”
Bailey said he and Gobbetti would partner across the organization.
“I will focus more specifically on design, the products, creativity, architecture, marketing, communication, experiences. He will focus more on the operational side, finance, retail and merchandising. I see this really as two pieces working together.”
Gobbetti is ceo at Céline and will begin work at Burberry in 2017, although a specific date has not been set. Both Bailey and Gobbetti will report to chairman John Peace.
Brown will join the business and the board in early 2017 and report to Gobbetti. She will have responsibility for finance, investor relations, IT, global business services and business transformation.
Brown is currently chief financial officer at the medical technology business Smith & Nephew plc.
Bailey called Brown’s new role “important, combining a number of functions together with oversight of our ways of working efficiencies. She is very well qualified to take responsibility for this important and ongoing initiative.”
Gobbetti has been at Céline since 2008, arriving in tandem with Philo and engineering a swift rejuvenation and overhaul of the brand.
Previously, he had orchestrated a turnaround at Givenchy, recruiting then unknown Italian designer Riccardo Tisci as its new couturier.
A calm, methodical manager, Gobbetti was seen a rising star within LVMH Moët Hennessy Louis Vuitton. He had joined the French luxury group in 2004 from Moschino, where he had been ceo since 1993.
Prior to Moschino, Gobbetti worked at Bottega Veneta in the U.S. and Valextra in Italy.
As part of the shakeup, Burberry’s chief financial officer, Carol Fairweather, has decided to leave the business to pursue new opportunities, Burberry said.
She will help to manage the transition following Brown’s arrival and will step down from the board by the end of January 2017. She will be leaving the company at the end of the financial year in March.
In a flash note following the announcement on Monday, Luca Solca, managing director at Exane BNP Paribas, called the changes “a step forward for Burberry, where we perceived a need of reinvention and stronger direction. The first issue to be tackled was to eliminate the joint role — Bailey’s double title of chief creative and chief executive officer. This will be done in 2017. More could change further down the road.”
Solca said that until now Burberry “seemed stuck with a less than ideal senior management structure,” and both the business and the share price had suffered under Bailey’s dual role.
He added that Gobbetti would have to prove himself in a much larger company than Céline, while Brown will have to make her experience relevant and credible in a very different industry.
Questioned by investors last month about a possible new appointment, Bailey said: “I balance my work with a phenomenal team of people,” adding he would offer up specifics in due course.
As reported, Stacey Cartwright, Burberry’s former chief financial officer, and now head of Harvey Nichols, and Gian Giacomo Ferraris, the former Versace ceo, both denied to WWD that they are going to take up the potential role at Burberry.
In May, Bailey addressed investors, outlining a new strategy aimed at driving top and bottom line growth — and slashing costs — against a backdrop of eroding sales and profits.
Bailey’s plan includes tightening operations, downsizing the number of product lines, and shifting the focus from high-spending tourists to locals and to Burberry’s younger, digitally engaged fan base.
On Wednesday, Burberry is set to release a first-quarter trading update. In September, Burberry will stage its first see-now-buy-now coed fashion show with both collections hitting the shop floor as soon as the curtain comes down.