Christopher Bailey and guestStudent Fashion Week, London, Britain - 08 Jun 2016

LONDON — After 16 years at Britain’s largest luxury fashion brand, Christopher Bailey is hanging up his Burberry trench. The company said Tuesday that Bailey, president and chief creative officer, would resign at the end of 2018.

Burberry said that as the company “begins the next decade of its journey, Christopher has concluded that after 17 years it will be the right time for him to pursue new creative projects.

“Christopher will remain president and chief creative officer until March 31, 2018, when he will step down from the board. He will provide his full support to chief executive officer Marco Gobbetti and the team on the transition until Dec. 31, 2018.”

It took a while for markets to digest the news: Burberry’s share price declined throughout the morning on Tuesday and had fallen 1.8 percent to 18.88 pounds by 12:15 p.m. CET.

The announcement came in the wake of speculation earlier this year that Bailey, who has been with Burberry since 2001, and who had served as chief creative officer and ceo from 2014 until July 2017, was leaving the company.

In January, Burberry denied that Bailey was headed for the exit, and in May, as Bailey prepared to hand over the ceo reins to Gobbetti, he affirmed that returning to a full-time creative role “will allow me to redouble my focus on design, product and telling stories,” and that he’d be working closely with Gobbetti.

It’s now up to Gobbetti, who said he’s sad to see Bailey leave, to find a successor, although there should be no shortage of candidates for the role that’s been filled by one of the longest-serving creative directors in fashion.

Since 2001, Bailey has been a key player in transforming the brand from heritage raincoat maker into fashion force, from a dusty, license-based business to a FTSE 100 company on the London Stock Exchange. He has been a constant at Burberry, helping to steer the business through the ups and downs of the international markets and consumer demand; deciding on the strategic switch to see-now-buy-now shows, and transitioning to digital sales and marketing, where Burberry has been a leader among the luxury brands.

Bailey worked alongside ceo’s Rose Marie Bravo and Angela Ahrendts before taking the business helm himself, to mixed reviews from the market. In July, he handed the ceo job to Gobbetti.

Bailey said: “It has been the great privilege of my life to be at Burberry, working alongside and learning from such an extraordinary group of people over the last 17 years. Burberry encapsulates so much of what is great about Britain. As an organization, it is creative, innovative and outward-looking.

“I do truly believe, however, that Burberry’s best days are still ahead of her, and that the company will go from strength to strength with the strategy we have developed and the exceptional talent we have in place led by Marco. I am excited to pursue new creative projects, but remain fully committed to the future success of this magnificent brand and to ensuring a smooth transition.”

Prior to Tuesday’s announcement, there was already speculation that Céline’s creative director and board member Phoebe Philo would take on the role, as she and Gobbetti had already proven themselves a powerful team at the LVMH Moët Hennessy Louis Vuitton-owned brand. In January, there was also much speculation that Clare Waight Keller was in line to replace Bailey before she took up the job of artistic director at Givenchy earlier this year.

In a report following the announcement, Luca Solca, of Exane BNP Paribas, said he and his team believe Bailey’s resignation “is a necessary move to make Burberry exciting again. The challenge for soft luxury brands to be relevant has moved to product innovation.”

Solca added that creative directors — like all artists — tend to produce variations on a theme and change should be a constant. “Most brands that have gone through a revival had to first find new creative resources,” he said, calling Bailey’s contribution to Burberry “massive.”

Whoever takes Bailey’s place, however, will be embarking on a very different journey at a different company than the one the Yorkshire native and Royal College of Art graduate joined in 2001.

In 2016, on Bailey’s watch as ceo, the company laid out a restructuring and cost-savings plan aimed at reshaping the company for a future of slower growth in fashion and luxury goods, and a digitally engaged, want-it-now customer base.

Burberry is looking to deliver at least 100 million pounds in annualized savings by fiscal 2018-19, as the company becomes a leaner machine.

As reported, in fiscal 2016-17, Bailey waived his bonus for the second year running, although he was still able to collect about 10.5 million pounds when part of a 1 million chunk of shares he was awarded in 2013 vested in July.

Bailey’s salary was 1.1 million pounds, flat on the previous year. He received benefits and allowances of 469,000 pounds; 330,000 pounds in pension contributions, and 240,000 pounds in a share plan.

In addition, he scooped an exceptional share award of 1.4 million pounds, as part of a performance-linked bonus agreed in 2014, when he took on the added role of ceo. That 1.4 million pounds payout represents a fraction of the share tranche that he received.

Creative projects or not, Bailey certainly won’t have to work again.

As reported, new management hires will see their perks slashed in the current fiscal year, which ends in March 2018. The company also plans to trim pension contributions for new, external executive director appointments and remove “sign-on” bonus or share awards, other than buy-outs, on recruitment.

Burberry’s profits for fiscal 2016-17, which ended on March 31, fell 7.3 percent to 286.8 million pounds in line with analysts’ expectations, while revenue was down 10.4 percent on a reported basis and 2 percent on an underlying one to 2.77 billion pounds.

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