Burberry’s golden-boy checks out

Fash­ion pow­er­house at a cross­roads as Christopher Bai­ley, the brand’s cre­ative muse, bows out, re­ports Ashley Arm­strong

The Sunday Telegraph - Money & Business - - Business - Vogue Easten­ders

‘We are both the boss,” quipped Burberry’s golden boy Christopher Bai­ley last year when dis­cussing the ar­rival of Marco Gob­betti as chief ex­ec­u­tive and his own awk­ward side­ways move into the role of “pres­i­dent”. Rather than soothe con­cerns about who was in con­trol, the state­ment raised red flags about how much longer the cre­ative de­signer would re­main at Burberry.

Last week in­vestors got their an­swer as the lux­ury fash­ion brand an­nounced Bai­ley would “tran­si­tion from Burberry” and bow out next year.

For fash­ion­istas, the news of Bai­ley’s de­par­ture af­ter 17 years was the end of an era. He had trans­formed a faded, trench coat maker – whose checked pat­tern had be­come the sta­ple diet of foot­ball fans and ac­tresses – into a global lux­ury pow­er­house known for its glossy, celebrity-stud­ded cam­paigns. When the Duchess of Cam­bridge ap­peared on the cover of

last year, she did so in a Burberry coat.

Bai­ley, the son of a car­pen­ter and M&S win­dow dresser who comes from the part of the UK where the brand’s mack­in­toshes are made, was al­ways been at pains to dis­dain “snooti­ness”. He proudly told fash­ion re­porters that he bought his first Burberry coat from a jumble sale in his home­town of Hal­i­fax as a teenager.

But de­spite Bai­ley’s hum­ble be­gin­nings, his ex­ces­sive pay­pack­ages have pro­voked furore. In 2014 the ma­jor­ity of Burberry’s share­hold­ers re­belled against an at­tempt to hand him £20m. Last week Burberry made much of Bai­ley’s de­ci­sion to sur­ren­der £16m worth of shares. How­ever, the de­signer, who re­ceived a £3.5m pay pack­age last year, will still walk off with around £12m in awards next year on top of his £1.1m salary.

Burberry’s chair­man Sir John Peace has al­ways de­fended Bai­ley’s high pay, de­scrib­ing him as “a rare tal­ent” who could com­mand a much higher pack­age out­side of the UK. How­ever, in­vestors have ar­gued that Peace’s ad­mi­ra­tion of Bai­ley had blinded him to the dan­gers of over-pro­mo­tion.

Bai­ley joined Burberry in 2001 af­ter stints at de­sign­ers at Gucci and Donna Karan. At the time the busi­ness was part of mini-con­glom­er­ate GUS, which also owned Ar­gos, and was run by Rose Marie Bravo who had damn­ingly de­clared the busi­ness was “a check de­sign that was head­ing to­wards obliv­ion”. A year af­ter Bai­ley joined, Burberry listed and Bravo started work on wrestling back con­trol of li­cences that had al­lowed the brand to be wa­tered down onto base­ball caps and polo shirts. She made moves to el­e­vate the brand, launch­ing high-end la­bel Burberry Pror­sum, with Bai­ley the driv­ing cre­ative force be­hind the push.

Bai­ley was seen as so in­stru­men­tal to the brand’s re­vival that he played a hand in pick­ing

An­gela Ahrendts as Burberry’s new boss. They proved to be a power cou­ple. A glam­orous and cool-headed num­ber cruncher, Ahrendts won over the City while Bai­ley acted as “brand tsar”. To­gether they de­liv­ered an up­dated ver­sion of “Cool Bri­tan­nia” to the staid, her­itage brand. In 2009, Bai­ley brought Burberry back to Lon­don Fash­ion Week. Snipey fash­ion mavens sug­gested it should be re­branded “Burberry Fash­ion Week” due to the amount of me­dia at­ten­tion it gar­nered. That year Bai­ley was named Bri­tish de­signer of the year and awarded an MBE. Ar­guably, it was his and Burberry’s zenith.

When Ahrendts an­nounced her de­par­ture for Ap­ple in 2014, Burberry com­mis­sioned a toe-curl­ing video of Peace and Ahrendts tak­ing it in turns to fawn­ingly in­ter­view Bai­ley. Ahrendts de­clared him “one of this gen­er­a­tion’s great­est vi­sion­ar­ies”.

A cre­ative tal­ent maybe, but the City was not over-en­am­oured about the de­ci­sion to award chief cre­ative of­fi­cer Bai­ley, with zero ex­pe­ri­ence of bal­ance sheets, the po­si­tion of chief ex­ec­u­tive too. It later be­came ap­par­ent that hand­ing Bai­ley the dual-role was a naked ef­fort to stop him from leav­ing. “If we had lost Christopher at the same time as we were los­ing An­gela, share­hold­ers would have never for­given the board,” said Peace.

To many an­a­lysts, it was a pro­mo­tion that should have never been made. Bai­ley took the reins of the FTSE 100 com­pany just as Burberry’s growth was com­ing off the boil. His ar­rival as chief ex­ec­u­tive co­in­cided with an in­dus­try-wide slump in lux­ury spend­ing, driven by a crack­down on bribery and a slow­down in eco­nomic growth in China. Burberry was hit hard as the re­gion ac­counted for a quar­ter of Burberry’s sales fol­low­ing a ram­pant store ex­pan­sion plan un­der Ahrendts. The flag­ging sales growth and fall­ing prof­its forced Bai­ley to cut his cloth dif­fer­ently. He an­nounced a £100m cost slash­ing plan. How­ever, it soon be­came clear that in­vestors were un­com­fort­able with Bai­ley’s abil­ity to steer the busi­ness through its chal­lenges. Last July, Burberry an­nounced Marco Gob­betti would be join­ing from Ce­line as chief ex­ec­u­tive while Bai­ley would keep the same salary and perks, re­main chief cre­ative of­fi­cer, and gain a new, un­usual

Hedi Sli­mane (ex-saint Lau­rent)

Sli­mane has a proven track record of con­sumer­friendly de­signs but is con­sid­ered an “ab­so­lute diva”. Rock aes­thet­ics could fit Burberry. “pres­i­dent” ti­tle on his busi­ness cards. Share­hold­ers were less than ec­static about Burberry ef­fec­tively pay­ing two chief ex­ec­u­tive salaries.

Bai­ley’s de­par­ture will bring an end to the “won­der­fully col­lab­o­ra­tive part­ner­ship” he had hoped to have with Gob­betti. “I think no one was ex­pect­ing Bai­ley to last for much longer,” says one fash­ion in­sider.

How­ever, Burberry now faces one of the big­gest chal­lenges since its brush with soap­star Daniella West­brook in the Nineties. While Bai­ley may have been on bor­rowed time in the board­room, re­plac­ing his cre­ative tal­ents will not be easy. Gob­betti, who is ex­pected to un­veil his new strat­egy to in­vestors next week, will be well aware that he risks a fash­ion dis­as­ter. “A lux­ury brand’s suc­cess hinges on their cre­ative tal­ent, they make the prod­uct which the brand is built on, get­ting that wrong is a ter­ri­fy­ing thought,” says one head­hunter.

French lux­ury brand Lan­vin is still strug­gling with fall­ing sales and grow­ing losses af­ter fir­ing long­time de­signer Al­ber El­baz. And Gucci limped along for over a decade af­ter fir­ing Tom Ford be­fore un­earthing the un­known cre­ative tal­ent of Alessan­dro Michele, whose whim­si­cal geek-chic cre­ations have been a rocket booster for sales.

“Cre­ative di­rec­tors – like all artists – tend to pro­duce vari­a­tions on a theme,” says Ex­ane BNP an­a­lyst Luca Solca. “Most brands that have gone through a re­vival had to first find new cre­ative re­sources.”

Could Burberry fol­low Gucci and take a bold gam­ble on an emerg­ing cre­ative tal­ent, or en­list a col­lab­o­ra­tion like at Kenzo or Preen?

With Bai­ley’s last fash­ion col­lec­tion ex­pected in Fe­bru­ary, the pres­sure will be on Gob­betti to win over both the “frow” and the Square Mile when he un­veils his hire.

‘If we had lost Christopher at the same time as we were los­ing An­gela, share­hold­ers may never have for­given us’

In the run­ning Fash­ion­ista favourites

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