Burberry chief executive Marco Gobbetti to step down from leading the fashion firm

·2 min read
Burberry’s CEO is planning to step down (Burberry)
Burberry’s CEO is planning to step down (Burberry)

Burberry shares crashed on Monday as boss Marco Gobbetti, credited with reviving the British fashion champion, announced his shock resignation.

The shares dropped more than 8%, or 188p, to 2062p after the retailer, known for its trademark trenchcoats, said the luxury goods expert is set to step down at the end of the year.

The chief executive has led the FTSE 100 company since 2017, taking over from Burberry veteran Christopher Bailey. He has made a number of changes there and shares had gained 37% since his appointment to Friday’s close price.

Gobbetti is leaving to head up luxury goods group Salvatore Ferragamo, an opportunity that will enable the 62-year-old to return to Italy and be closer to his family.

Burberry said it will now begin the search for a successor for Gobbetti .

Gerry Murphy, Burberry’s chairman, said: “The board and I are naturally disappointed by Marco's decision but we understand and fully respect his desire to return to Italy after nearly 20 years abroad.”

Murphy added that the boss “has had a transformative impact and established a clearly-defined purpose and strategy, an outstanding team and strong brand momentum”.

Shareholders looked disappointed and surprised by the update. A note from Jefferies said: “The fact that the search for a successor is to start now and that Gobbetti’s unvested shares will lapse in full points to a sudden decision in our view.”

Bernstein analyst Luca Solca said: “In reality, Burberry is in a far better position today than when Marco took responsibility for it.”

Under Gobbetti’s helm the fashion company moved more upmarket to up the fight with rivals. That included more expensive products and taking the axe to a number of stores not close enough to Burberry’s high-spending shoppers.

Since joining he has brought in creative chief Riccardo Tisci, and a range of new collections have been introduced. Tisci’s menswear collection last week was well received by the fashion industry.

Like other luxury brands, Burberry saw sales hurt due to the pandemic, but it said last month that a recovery accelerated through the year leading to fourth quarter comparable store sales increasing 32% year on year.

Prior to joining Burberry, Gobbetti was at luxury leather group Celine, where he was chairman and chief executive from 2008 to 2016. He previously also worked at Givenchy and Moschino.

He today said: “With Burberry re-energised and firmly set on a path to strong growth, I feel that now is the right time for me to step down.”.

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