By Elizabeth Paton
Marco Gobbetti, who was tasked with turning Burberry into more of an upmarket luxury brand when he was appointed chief executive in 2017, is quitting after five years in the role.
Shares in the British fashion house fell by 8 percent on Monday after news broke that Mr. Gobbetti, who had previously run brands including Céline and Givenchy, would be leaving Burberry at the end of the year to become chief executive of Salvatore Ferragamo in Italy.
Burberry said that Mr. Gobbetti had notified the board that he would be leaving “to take up another opportunity that will enable him to return to Italy and be closer to his family.” Burberry’s chairman, Gerry Murphy, said that he was “naturally disappointed” but that he fully respected Mr. Gobbetti’s decision “to return to Italy after nearly 20 years abroad.”
Mr. Gobbetti oversaw a broad overhaul at Burberry that included raising prices and cutting discounts as well as increasing the brand’s exposure in areas like handbags, where its offerings were seen as weak and where profit margins are higher.
He also focused on expansion in Asia, particularly in China, the world’s fastest-growing luxury market. In 2018, Mr. Gobbetti hired Riccardo Tisci, whom he had previously worked with at Givenchy, to be Burberry’s chief creative officer. Mr. Tisci has remade the company’s logo and infused its runway collections, once staid and traditional, with gender fluidity and streetwear.
There have been bumps in the road, including a scandal in 2018 over the burning of unsold stock (Burberry said the practice was aimed at preserving “brand value,” but it stopped after outcries), and another this year when it was among the first luxury brands to be assailed by a Chinese social-media backlash to Western accusations of abuses in Xinjiang.
Although Burberry’s share price has doubled in the past five years, it has still underperformed those of global luxury peers such as LVMH and Kering.
“The departure of Marco Gobbetti seems the seal on a partially successful brand turnaround,” said Luca Solca, an analyst at Bernstein, in a note published for investors on Monday. “In reality, Burberry is in a far better position today than when Marco took responsibility for it. Yet, the magnitude of the issues at hand didn’t offer a chance for the runway success that some had hoped for.”
A search for a successor for Mr. Gobbetti is underway.
Site Information Navigation
Source: Read Full Article