Burberry names Bailey CEO as Ahrendts quits for Apple
By James Davey and Kate Holton, ReutersLONDON--Christopher Bailey, the designer credited with restoring the cachet to fashion brand Burberry , is to become chief executive next year when long-standing boss Angela Ahrendts will move to Apple.
October 16, 2013, 12:11 am TWN
The 157-year-old British fashion house, famous for its camel, red and black check pattern, said on Tuesday that Ahrendts would step down by mid-2014 after which Bailey would combine his role as chief creative officer with being chief executive.
News that the 42-year-old Yorkshireman would hold both positions sparked concern among some analysts that he might be taking on too much, and sent shares in the group down 6 percent in early trading, valuing the business at 6.6 billion pounds.
“There will undoubtedly be relief that Mr. Bailey, the driving force behind the brand for the last 12 years, is staying,” Morgan Stanley said in a note to clients.
“But we anticipate some investor concern about combining the Chief Creative Officer and CEO roles, which are both time consuming and require very different skill sets.”
Ahrendts, who has been Burberry boss for eight years, during which time its share price has soared about 250 percent, will take up a newly created position at Apple as a senior vice president with oversight of retail and online stores. She will report directly to CEO Tim Cook.
Ahrendts will be looking to do better than the last chief executive of a British company who left London to join Apple — John Browett who quit Dixons to lead the iPad and iPhone maker's global retail expansion in 2012. He left six months later.
Bailey joined Burberry in 2001 and has held the major creative role for six years, helping to rebuild the group after it became a victim of its own success in the 1990s when its trademark pattern was embraced by the mass market, losing its appeal to its core wealthy clientele.
Under Ahrendts and Bailey, the group has refocused on the luxury market, increased its store base and expanded rapidly in emerging markets like China, and it reported first-half results on Tuesday showing the benefits of that approach.
“The strategies which have underpinned our success in recent years will remain unchanged as Christopher has been an integral part in developing these over the last 12 years,” chief financial officer Carol Fairweather told reporters.
Burberry, which boasts Cara Delevingne and Jourdan Dunn as faces of the brand, reported retail revenue up 17 percent to 694 million pounds (US$1.11 billion) in the six months to Sept. 30 - bang in line with analysts' forecasts.
Its total revenue was 1.03 billion pounds, up 14 percent.