Burberry C.E.O. to Step Down, Ending Dual-Role Experiment at Helm

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Burberry C.E.O. to Step Down, Ending Dual-Role Experiment at Helm

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LONDON — Burberry’s chief executive is resigning from that post, ending an experiment in which the British luxury house became the first publicly listed fashion company to allow one person to hold the roles of chief executive and creative director at once.

The company announced the change for the executive, Christopher Bailey, on Monday. He accepted a 75 percent pay cut less than month ago, after a slowdown in sales, a fall in profit and a flurry of executive departures from the company. He will stay at Burberry in the new dual role of president and chief creative officer, and focus on products.

Marco Gobbetti, chairman and chief executive of the French luxury brand Céline, will become chief executive of Burberry next year.

Mr. Bailey appeared to struggle to deal with slowing demand from mainland China and Hong Kong, which account for around 40 percent of Burberry’s sales. In June, his pay was cut after a disappointing year in which the company’s share price tumbled 38 percent and pretax profit slipped 7 percent.

He responded by outlining efforts to overhaul the business that included a 100 million pound, or $130 million, cost-cutting drive, a share-buyback plan and promises of more sales through an expansion of Burberry’s online presence. In February, Burberry also said that it would combine its men’s and women’s wear shows, and that it would display the results in September during what is traditionally women’s wear week. And this spring, the company said it would cut its product lineup.

Questions around the feasibility of Mr. Bailey’s continuing to hold two executive positions were nevertheless rife, and his move was welcomed by analysts.

“Burberry seemed stuck with a less-than-ideal senior management structure,” Luca Solca, a luxury analyst at Exane BNP Paribas, wrote in a note to investors. “It was clear that the ‘dual role’ experiment was not working, and that both the business and the share price had suffered.”

Mr. Solca added, “This is a step forward for Burberry.”

Burberry shares closed up more than 4 percent in London after news of the reshuffle. Investors have put months of pressure on Mr. Bailey, who took on his dual leadership positions after the departure of his predecessor, Angela Ahrendts, to Apple in spring 2014.

Mr. Bailey’s exit from the top job continues a game of musical chairs in the C-suites of the luxury industry, which is on course for its weakest year in sales since 2009. In May, the beleaguered German suit maker Hugo Boss promoted its finance chief, Mark Langer, after a series of profit warnings. That same month, Jonathan Akeroyd, formerly at Alexander McQueen, was appointed chief executive of Gianni Versace, replacing Gian Giacomo Ferraris, who had led the company since 2009. Last month, the Ralph Lauren Corporation poached the Coach finance chief, Jane Nielsen, to be its chief financial officer as part of turnaround efforts.

The move does not signal the end of the designer-as-chief-executive trend, however, a model that has served some companies, like Giorgio Armani, well. Last month, the designer Alexander Wang was appointed chief executive of the company that bears his name, taking on a dual role, after the resignation of Rodrigo Bazan. Mr. Bazan had left to join Thom Browne. This followed the news that Marcus Wainwright, previously co-chief executive and designer of Rag & Bone, would become sole chief and designer.

Those companies are significantly smaller than Burberry, and privately held. But the industry will still be watching to see if they can pull off what Mr. Bailey seemingly could not.

Mr. Bailey will report to John Peace, the Burberry chairman, as will the new chief executive, Mr. Gobbetti. A 20-year veteran of the luxury industry, with stints at Givenchy, Moschino and Bottega Veneta, Mr. Gobbetti will be “responsible for all commercial, operational and financial elements of the business,” Burberry said in a statement.

“Marco brings incredible experience and skills in luxury and retail with him that will be invaluable to us,” Mr. Bailey said in the statement. “I am delighted to welcome Marco, and I am looking forward to working closely with him alongside the rest of our highly talented teams. On a personal level, I know that we are going to enjoy a wonderfully collaborative partnership that makes me very excited for our future at Burberry.”

Burberry also said that Carol Fairweather, its chief financial officer, would step down and leave by the end of the financial year. She will be replaced by Julie Brown, who joins from the orthotics company Smith & Nephew, where she holds the same position.

“Since taking on the combined role of chief executive and creative chief, Christopher Bailey has done an excellent job set against a backdrop of challenging market conditions,” Mr. Peace said in the statement. “The review that he has led into our ways of working is the blueprint for the next phase of Burberry’s evolution. In order to maximize our ability to successfully implement these plans, Christopher identified the need for a new chief executive for the business.”

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