Burberry’s Gobbetti Steps Down to Take Top Ferragamo Job

Burberry Group Plc Chief Executive Officer Marco Gobbetti will leave at the end of this year to take up the top post at Italy’s Salvatore Ferragamo SpA, shifting from one luxury brand in the middle of a turnaround to another that’s seeking to embark on one.

The move to Ferragamo will allow Gobbetti to return to his native Italy after years working abroad, including almost five leading the British label. But it casts a cloud over the direction of Burberry, which has been tapping social media buzz to attract younger luxury shoppers.

Ferragamo shares were little changed in Milan, while Burberry fell 6.3% as of 11 a.m. London time after sliding as much as 10% earlier.

With the search for a new CEO at Burberry starting only now, Monday’s announcements point to a sudden decision, Jefferies analyst Flavio Cereda said. Burberry’s board found out on Sunday about Gobbetti’s decision, according to a person familiar with the matter.

Designer Tisci

At Burberry, Gobbetti brought in Italian designer Riccardo Tisci to oversee a revamp of the trench coat maker, aimed at moving the brand image further upmarket. He also purchased an Italian leather-goods maker to develop Burberry handbags.

“Burberry is in a far better position today than when Marco took responsibility for it,” Sanford C. Bernstein analyst Luca Solca said in an email. “Yet the magnitude of the issues at hand didn’t offer a chance for the runway success that some had hoped for.

Burberry’s Gobbetti Steps Down to Take Top Ferragamo Job

“Marco takes over another monumental challenge by becoming the CEO of Ferragamo. The brand needs a thorough rejuvenation of its marketing fundamentals.”

Ferragamo, whose shoes were favorites of Hollywood actresses like Audrey Hepburn and Joan Crawford, has struggled more than most peers to appeal to a new generation of consumers. The Italian brand named Paul Andrew creative director in 2019, but he left earlier this year.

Gobbetti will probably “look to hire a high-caliber individual to lead the design function and rejuvenate the Ferragamo sleeping beauty,” Thomas Chauvet, analyst at Citigroup wrote in a note. “Time will tell whether Tisci joins his former boss at Ferragamo next year.”

Formerly CEO of Moschino, Gobbetti spent 13 years at LVMH, where he ran Givenchy and Celine before taking up his current position at Burberry. At Givenchy, Gobbetti also brought in Tisci in the top creative role.

Like Ferragamo, Burberry was struggling to attract the Instagram crowd when Gobbetti took over. The British company recently launched a campaign featuring Kendall Jenner showcasing the Olympia handbag. Gobbetti’s success in improving this crucial category may have made him more appealing to the Italian company.

Sales Recovery

Still, Burberry has trailed luxury rivals like LVMH and Kering SA in recovering from Covid-19 lockdowns, with sales remaining below 2019 levels in the latest quarter. Gobbetti will provide support to the leadership team on an “orderly transition” at Burberry, the company said.

What Bloomberg Intelligence says:

“Gobbetti’s exit from the company by the end of the year won’t be an easy replacement, after a visible transition in the luxury brand and strength since he joined in early 2017. A seasoned visionary in the role, in our view, is the best fit -- yet may not be easy to identify -- in order to allow creative design to flourish in its separate role.”

-- Deborah Aitken, BI luxury-goods analyst

Burberry CEO Exit Not Easy Change; Role Should Stay Apart: React

Questions also remain regarding Ferragamo, notably what will happen to current CEO Micaela Le Divelec Lemmi, who’s been at the helm for almost three years. Her name wasn’t mentioned in Ferragamo’s statement. An extraordinary meeting of the board is scheduled for July 1.

Investors will be interested to find out how much Gobbetti will get paid at the Italian brand. He made 2.25 million pounds ($3.14 million) at Burberry last year.

©2021 Bloomberg L.P.

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