Burberry: chequered exit prompts succession crisis
Marco Gobbetti, boss of Britain’s luxury flagship, is leaving to lead Salvatore Ferragamo
Talk about trench warfare. Shares in Burberry sank by nearly 10% on Monday – knocking £1bn off the value of Britain’s luxury flagship – on news that the group’s transformative CEO, Marco Gobbetti, is returning to Italy to lead Salvatore Ferragamo, the Florentine design house known for its leather shoes and silk ties.
The move is “puzzling”, said Lisa Jucca on Reuters Breakingviews. Gobbetti is leaving with his “Burberry turnaround still unfinished”, to join a dynastic brand a third of its size that is also “badly in need of a turnaround”. Perhaps he’s a glutton for punishment; perhaps the Italians are paying more; perhaps he misses home. But the move left the market wondering darkly why Gobbetti is leaving just before his labours were due to start bearing real fruit.
Gobbetti’s ciao to London seems to have “blindsided” Burberry, said Nils Pratley in The Guardian. He was hired in 2017 “to solve one boardroom crisis” (the “uncomfortable reign” of designer-turned-CEO Christopher Bailey) but has now “caused another”. There doesn’t seem to be a succession plan – not ideal when “the UK’s leading fashion house is persistently talked about as a takeover candidate”. Worse, there are fears that chief creative officer Riccardo Tisci – credited with imbuing the company with a more upmarket, youthful and edgy vibe – may follow Gobbetti.
Don’t bet against it, said Anna Murphy in The Times. “The relationship between a chief executive and his designer echoes that between a jockey and his horse”, and Tisci, who previously partnered with Gobbetti at Givenchy, “must be slightly restless in his stable”. Although numbers have improved on their watch (shares are up by more than a third), there has been “no proper Burberry moment”. In this business, that’s bad news.