Burberry’s golden-boy checks out
Fashion powerhouse at a crossroads as Christopher Bailey, the brand’s creative muse, bows out, reports Ashley Armstrong
‘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’
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