Burberry Christopher Bailey Is Replaced as CEO

Burberry's Christopher Bailey Is Replaced as CEO

Burberry's chief executive officer Christopher Bailey has handed over his CEO title to Celine's former president, Marco Gobbetti, according to the British luxury brand.

Bailey has instead accepted the role of president of Burberry and will continue to serve as chief creative officer, a role he has held since 2009.

��I am delighted to welcome Marco, and I am looking forward to working closely with him alongside the rest of our highly talented teams. On a personal level, I know that we are going to enjoy a wonderfully collaborative partnership that makes me very excited for our future at Burberry,�� said Bailey in a statement.

Burberry's decision to appoint Gobbetti as CEO and shift Bailey over doesn't necessarily come as a surprise. The brand has been in hot water in recent quarters due to a decline in tourism and sales in Hong Kong and Europe. To avoid further losses, the company has taken a number of cost-cutting initiatives this year, including consolidating all of its diffusion lines (Brit, London, and Prorsum) in April and lowering Bailey's pay 75% from £7.51 million to £1.89 million this June.

Since the news of Gobbetti's new appointment this morning, Burberry's stock shot up by over 6.5%, one of its highest bumps since the company's stocks fell about 7.9% in April.

Low performance may not be the only reason for Bailey's step back. Word on the street is that the company's investors haven't been too pleased with the dual role of chief creative officer and CEO Bailey took on in 2014 - as the New York Times' Vanessa Friedman put it, ��the Christopher Bailey Great Burberry Experiment.�� The Financial Times reported in May that the brand's investors warned that ��tensions would come to a head�� at this month's annual meeting if something was not done about Bailey's role.

After all, Bailey is a designer first and foremost, with a BA in fashion design from the University of Westminster and a masters from the Royal College of Art. By taking on a business role in addition to a creative one, Bailey's focus was shifted away from what he does best: shaping Burberry's legacy as one of Britain's most iconic fashion brands, one plaid-lined trench coat at a time.

Bailey's new role as president and chief creative officer will allow him to oversee all elements of brand and design. As for new CEO Gobbetti Marco, he has nearly 20 years of experience in the luxury industry, with past roles at Givenchy, Bottega Veneta, and Moschino. He is set to join the board in 2017. Both Gobbetti and Bailey will report to Burberry's chairman, Sir John Peace.

Stay tuned for how this impacts the Burberry goods we see hitting shelves.