Marco Gobbetti’s search for greener pastures in Italy sent Burberry’s shares dropping.
The Burberry CEO announced his resignation effective the year-end to take a position with one of the British luxury brand’s rivals, Salvatore Ferragamo, resulting in a share price drop to nearly 8% in London.
The famed CEO has been responsible for Burberry’s turnaround and transformation for five years. In a company statement, Burberry said they respected Gobbetti’s wish to return to Italy and spend more time with family.
Best years at Burberry
Appointed in July 2017, Gobbetti joined Burberry, determined to lead the company’s evolution as a luxury fashion label. Previously, he had worked for 13 years at the French luxury giant LVMH as the CEO of Celine and Givenchy. As Burberry CEO, company stock has gained 35% overall since his appointment.
Burberry became renowned for its signature beige check design and British heritage that reflects its trench coats. Its founder, Thomas Burberry, designed its clothing line to serve as protection from British weather. Now 165 years old, Burberry has since made a giant leap from clothing arctic explorers to becoming a famous British luxury brand.
Luca Solca, the senior research analyst for Bernstein, said in a CNN interview that Gobbetti’s leadership had resulted in a far better position for Burberry from when he joined. However, what he did not see with Gobbetii as CEO was the brand’s anticipated runway success.
Is there a strategic reset for Burberry?
Still, people are waiting and seeing whether Gobbetti’s exit amid success reflects a strategic reset with someone new at the helm, Solca explained. Naturally, this has investors worrying since Marco’s leaving does not seem that he was “very self-assured of the success at Burberry.”
As a result, investors are holding out until things become clear with Burberry regarding the change of leadership and company plans.
Burberry chair Gerry Murphy expressed his regrets and the board’s being “naturally disappointed” with the Gobbetti exit. However, he said that it’s easy to accept a decision to go home to Italy after two decades of living abroad.
Big shoes to fill
Gobbetti was known for controversial decisions. In 2018, he hired Riccardo Tisci, Givenchy’s previous artistic director, to be the chief creative officer of Burberry. Tisci was recruited to popularize the brand to a younger and diverse consumer base and replaced its 17-year creative officer Christopher Bailey.
Solca described Burberry as lacking flair and being “a bit boring” before Gobbetti taking over. However, Gobbetti’s ideas and plans for Burberry were “a breath of fresh air.”
Meanwhile, Gobbetti explained his departure as having reached the proper time to step down, “with Burberry re-energized.” While catapulting Burberry to the level of Louis Vuitton, Prada, and Gucci are still underway, the brand has undoubtedly become more relevant than it was years ago, Solca added.
Salvatore Ferragamo confirmed in a statement that Gobbetti would fill his role as CEO once contractual obligations release him from Burberry. It also added that with Gobbetti’s new position, there would be monumental challenges ahead to rejuvenate the brand’s marketing fundamentals.