The U.K.’s biggest luxury brand Burberry appointed Marco Gobbetti as its new chief executive, replacing Christopher Bailey who has been the target of criticisms for declining sales.
Bailey, who was appointed CEO in October 2013 in addition to his role as the chief creative officer, will take on the newly created role of president. According to experts, holding both the CEO and chief creative officer positions was too much responsibility for Bailey.
“Burberry seemed stuck with a less than ideal senior management structure. It was clear that the ‘dual role’ solution was not working, and that both the business and the share price had suffered under Christopher Bailey’s joint CEO and Creative Director stewardship,” said Luca Solca, the luxury goods analyst at Exane BNP Paribas.
Burberry Group PLC (BRBY:LN) shares dropped by nearly 25 percent over the last 12 months, and the company has been struggling with slow revenue growth in the United States and China. Critics say Burberry has excessive exposure to China, which accounts for 35 percent of the company’s overall sales. Especially, lower luxury spending in Hong Kong and Macau affected the company’s overall performance. Sales from the traveling luxury consumer from China also declined sharply.
