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IInvestors were shaken last month when they learned that Burberry boss Marco Gobbetti was resigning to return to Italy after nearly five years at the helm of the British luxury brand, news that caused shares to fall nearly 9%.
His departure and Burberry’s succession plans are sure to prompt many questions from shareholders at the company’s annual meeting in London on Wednesday. Gobbetti is the man credited with turning the fashion label – known for its trench coats and checkered scarves – since taking over from Christopher Bailey in 2017 as chief executive.
Jonathan Akeroyd of Versace, Emmanuel Gintzburger of Alexander McQueen and former Tiffany boss Alessandro Bogliolo have been mentioned as potential candidates to succeed Gobbetti.
The luxury veteran, who led brands such as Celine, Givenchy and Moschino before joining Burberry, is staying until the end of the year, giving the company time to find a successor. He will then head the small luxury fashion brand Salvatore Ferragamo, based in Florence and famous for making shoes worn by Hollywood stars such as Marilyn Monroe and Audrey Hepburn – a job that will bring him closer to his family and friends.
Another burning question for investors is whether Riccardo Tisci, the creative director of Burberry, will follow him out the door. The Italian fashion designer has also reportedly struggled to get away from his family in Italy during the pandemic.
Analysts at Jefferies Flavio Cereda and Kathryn Parker said that while results have been mixed so far, with Burberry being one of the luxury brands hardest hit by the economic downturn from coronavirus, the new chief executive should stick to the current strategy as “a further change in management would be pointless right now.” Holding back Tisci is also crucial: “Any new CEO had better get along with him”.
In recent years, Burberry has slashed discounts, focused on streetwear, and used stars such as footballer Marcus Rashford to broaden its appeal to younger shoppers. It is also at the forefront of digital: to mark the recent launch of its pocket bag, it has created an augmented reality experience that allows users to design their own 3D pocket bag sculptures and share them on networks. social.
In the first quarter results expected two days after the AGM, Burberry is expected to reveal a 71% increase in retail sales comparable to £ 439million between April and June compared to the previous year, when travel restrictions and store closings have plunged sales. However, that would remain 13% below pre-pandemic levels of £ 498million.
Jefferies analysts expect strong sales in the Americas, helped by advertising campaigns such as the Olympia bag, and in Asia, although Chinese sales weakened slightly following the fallout from the cotton scandal in Xinjiang. An international backlash followed claims that the region’s Uyghur minority was being used as forced labor in garment factories, prompting China to strike back at some Western brands, including Burberry, and champion local alternatives.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said Gobbetti would leave the company in “elegant form” as she continued her recovery from Covid, but the pressures remained.
“The new collections are very well received, which testifies to Burberry’s efforts to consolidate itself in the most exclusive segment of the luxury chain.
“Above all, the very important Asian market is rebounding strongly. But Mr Gobbetti will be a difficult act to follow, and his replacement will be a crucial choice. ”
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