What spoilsports they are at Burberry. When Christopher Bailey, chief creative whizz, also ascended to the chief executive’s throne in 2013, the company treated us to an unintentionally hilarious video that set new standards in corporate self-congratulation.
Departing chief Angela Ahrendts gushed that she was handing over to “one of this generation’s greatest visionaries”. Bailey explained to Sir John Peace, his admiring chairman, that “we’ve done a lot of dreaming”. At no point did any of the trio address the questions shareholders wanted to ask. Was it really right, governance-wise, for Bailey to be both chief executive and chief creative officer? Could two big jobs prove one too many?
Now there are answers of sorts – but no follow-up video provided by the company. Bailey is dropping the chief executive’s gig but keeping the creative role. But it’s not quite a reversion to Burberry’s pre-2013 management model. Bailey will now also be president, a title normally reserved in a corporate context for founders whose days in the frontline are exhausted.
On this occasion, the presidency is intended to denote the opposite. Bailey will still have a hand in strategy, alongside new chief executive Marco Gobbetti, an import from French firm Céline. The rejig could prove awkward since the board will have to arbitrate if Bailey and Gobbetti disagree over strategy. But a messy compromise is better than Bailey trying to do the company’s two biggest jobs at once.
Burberry’s world of luxury fashion has imploded in the past year as Chinese tourists have cut their spending. It is unfair to expect one individual to be responsible for cost-cutting and renegotiating licences while also dreaming up the fashions. If it was Bailey’s idea to hire Gobbetti – which is the official line and which Bailey confirmed in an interview with Bloomberg – then good for him.
But Peace, as chairman, can hardly expect shareholders to swallow the line that the shuffle is merely “the next phase of Burberry’s evolution”.
Come on, Sir John, you made Bailey chief executive in 2013 because you were afraid he would follow Ahrendts out of the door. You succeeded in retaining Bailey, but his dual role was always likely to prove untenable as soon as the weather turned rougher for up-market brands and Burberry’s share price went soft.
More simply, the appointment was a mistake.
