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| Version 1 | Version 2 |
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| Christopher Bailey to cut all ties with Burberry | Christopher Bailey to cut all ties with Burberry |
| (about 1 hour later) | |
| Christopher Bailey, who stepped down as chief executive of luxury goods group Burberry in July following investor unease, is to leave the company entirely by the end of next year with an expected payout of up to £12m. | |
| Shares in the business, renowned for its trenchcoats and distinctive check patterns, fell more than 2% initially, although they were later down just 0.3%. | Shares in the business, renowned for its trenchcoats and distinctive check patterns, fell more than 2% initially, although they were later down just 0.3%. |
| Bailey was credited with helping transform Burberry from a small UK company into a global fashion brand, building up its digital presence by streaming its fashion shows live and redesigning its flagship stores. | Bailey was credited with helping transform Burberry from a small UK company into a global fashion brand, building up its digital presence by streaming its fashion shows live and redesigning its flagship stores. |
| Bailey will receive his salary, pension and contractual cash allowance and non-cash benefits until the end of 2018 but no cash bonus will be paid for the period after March. This is worth about £1.9m, and on top of that he is entitled to share awards which could be worth up to £10m at current prices. | |
| But he is surrendering various other share awards given as part of the company’s incentive plans, valued at £16m. | |
| Bailey has been at the company for 17 years and its chief creative designer since 2009, and in May 2014 he also became chief executive following the departure of Angela Ahrendts to Apple. | Bailey has been at the company for 17 years and its chief creative designer since 2009, and in May 2014 he also became chief executive following the departure of Angela Ahrendts to Apple. |
| Investors initially backed Bailey in his dual role, but anxiety over his leadership began to grow, following flagging sales, especially in key markets such as China and the Middle East. There were also protests against his pay packet, which rose from £1.9m to £3.5m last year, while he also received £10.5m in shares in July. | Investors initially backed Bailey in his dual role, but anxiety over his leadership began to grow, following flagging sales, especially in key markets such as China and the Middle East. There were also protests against his pay packet, which rose from £1.9m to £3.5m last year, while he also received £10.5m in shares in July. |
| As a result Burberry appointed the luxury goods veteran Marco Gobbetti as chief executive, with Bailey given the title of president to add to his chief creative officer role. | As a result Burberry appointed the luxury goods veteran Marco Gobbetti as chief executive, with Bailey given the title of president to add to his chief creative officer role. |
| Now in a statement Burberry said Bailey would step down in March 2018 “to pursue new creative projects”, but would provide support to Gobbetti until the end of next year. Gobbetti has been with Burberry since January, although he only formally took over as chief executive in July. Sources said the two had been working together on strategy, but Bailey felt with the new leadership in place it was time to move on. | Now in a statement Burberry said Bailey would step down in March 2018 “to pursue new creative projects”, but would provide support to Gobbetti until the end of next year. Gobbetti has been with Burberry since January, although he only formally took over as chief executive in July. Sources said the two had been working together on strategy, but Bailey felt with the new leadership in place it was time to move on. |
| Bailey said the decision to leave was not an easy one. He added: “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.” | Bailey said the decision to leave was not an easy one. He added: “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.” |
| Gobbetti said he was sad “not to have the opportunity to partner with [Bailey] for longer” but he had enormous confidence in the company’s future. | Gobbetti said he was sad “not to have the opportunity to partner with [Bailey] for longer” but he had enormous confidence in the company’s future. |
| Analyst Rogerio Fujimori at RBC Capital Markets said it was negative news for the company but pointed to Phoebe Philo at LVMH-owned Celine – Gobbetti’s previous employers – as a possible replacement for Bailey. | |
| Fujimori said: “We … view this as a near-term net negative for the stock given Mr Bailey’s long-term track record and investors’ renewed hopes that the brand would regain its mojo as Mr Bailey would focus on his creative role (which is what he does best) since Marco Gobbetti took over the chief executive role last July. | |
| “Market participants are now speculating on a potential high-profile name in the fashion world taking over the creative role at Burberry to open a new chapter for the brand. Many investors are inevitably linking today’s news to recent unsubstantiated press reports from Business of Fashion, which reported on 17 October that LVMH was interviewing designers to replace Celine director Phoebe Philo, who has been at Celine for the last 10 years and worked many years with ... Gobbetti, successfully turning around Celine.” | |
| Charlotte Pearce, retail analyst at GlobalData, said: “It is crucial that Burberry finds someone with respect for the brand’s British heritage but is able to further evolve the label creatively and bring it into a new era.” |