LONDON (Reuters Breakingviews) - Burberry can take off the kid gloves as it waves goodbye to Christopher Bailey. The design chief will leave the British fashion brand next year. It has taken the company three years to unpick the deferential decision to hand him the chief executive role. His exit gives new boss Marco Gobbetti a freer hand to implement the group’s much-needed turnaround plans.
Bailey has been a key figure at Burberry for almost 17 years. The group’s revenue has almost quadrupled from the 594 million pounds it recorded in its 2002 financial year; he also drove the brand’s early embrace of e-commerce. The 46-year-old has been unusually powerful for a non-founding designer. That was best illustrated by the ill-judged decision to promote him to the corner office when former boss Angela Ahrendts was poached by Apple in 2014.
When slowing sales and investor disquiet made that arrangement untenable, Burberry went to great lengths to keep Bailey on board. In July 2016, the company hired Gobbetti as chief executive, but created a president role for Bailey. He retained a seat on the board, earned a higher salary than his successor and reported to Chairman John Peace rather than Gobbetti.
Bailey will surrender share awards worth approximately 16 million pounds when he leaves at the end of next year. His exit signals the deep-rooted change taking place at Burberry; the group’s former finance director and chief operating officer have already left, while Peace, chairman since 2002, will also be replaced. That gives Gobbetti greater scope to attempt the kind of successful revamp currently underway at rival label Gucci. Bailey’s departure is the end of an era for Burberry. For shareholders it is also hopefully the beginning of a less deferential one.
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