Marco Gobbetti is the quiet man behind Céline, the minimalist luxury brand that brought normcore to the catwalk. Now, after his appointment as chief executive of Burberry, the British fashion company is in the unusual position of having two bosses.
Following pressure from shareholders, Christopher Bailey is moving to one side as the company seeks to turn around its flagging performance with additional retail and operational expertise.
Britain’s biggest luxury label has run into problems. When Bailey took over as chief executive in 2013, while retaining his role as chief creative officer, the brand was motoring, driven by seemingly insatiable demand for anything with Burberry’s trademark beige check from Chinese shoppers. But an economic slowdown and a crackdown on conspicuous consumption, together with limits on travel to the shopping mecca of Hong Kong following pro-democracy demonstrations, have harmed trade. Its shares have fallen from 1,908p to 1,203p.
The focus has shifted to cost cutting, streamlining the business and pulling in more shoppers to existing stores. Shareholders had been worried that Bailey lacked the right skills for these tasks.
Gobbetti is a management expert with a long pedigree in managing luxury businesses. He has had stints at Céline, Moschino and Givenchy, and was signed up with £4m in shares as a golden handshake.
He is relatively low profile, but Céline is a commercial success story, having enjoyed double-digit sales growth and strong profits at a time when its peers have been struggling.
The French label is highly regarded, so much so that fashion editors wear it. It’s a favourite label on the front row and a hot ticket at Paris fashion week, partly thanks to the company’s British designer Phoebe Philo, who has created a signature style that is minimal, chic and reassuringly expensive.
Gobbetti, working with Philo since her appointment as creative director in 2008, was the silent partner in the success of the brand, allowing Philo to concentrate on designing, while he worked on the business strategy that emphasised the discreet and rarified image of Céline.
Bailey has described the new set up – he has been given the title of president – as “a partnership built on respect and working collaboratively together”. He may have been attracted to Gobbetti’s apparent knack for working alongside creative types. Gobbetti partnered Riccardo Tisci at Givenchy before joining up successfully with Philo.
Bailey and Gobbetti will earn the same base salary of £1.1m, although Gobbetti will receive an annual cash allowance of £80,000 to cover his travel, car and clothing, compared with Bailey’s £464,000 a year in benefits. The incoming chief executive could receive nearly £7m in the year ahead if he hits targets for his annual bonus, worth double his salary, and a long-term share bonus of 3.25 times his salary.
Bailey may relish the creative freedom that Gobbetti allowed at the Céline head office, which he created in a Parisian neoclassical mansion known as the Hôtel Colbert de Torcy, where Philo oversaw nearly all the interior design. Such an expensive venture is unlikely to go down well with Burberry’s shareholders, but Gobbetti has a strong track record.
Having secured a masters degree in international management before joining the fashion world as a sales director at Bottega Veneta, Gobbetti has built up a wealth of experience in retail, particularly the vital leather goods sector. Handbags have been a key earner in the luxury market, although there are concerns that fashion companies have pushed prices to the limit. A typical Céline bag costs about £1,500, while an average Burberry bag is about £1,100.
After leaving Bottega Veneta, Gobbetti became managing director of Italian leather goods brand Valextra, before moving to Moschino in 1993 and then Givenchy.
The discreetly expensive world of Céline produced a turnover of less than €700m (£584m), according to analysts, against Burberry’s £2.5bn.
In the luxury fashion sector, Burberry represents mass appeal, and sales tactics vary accordingly. While Céline’s advertising has featured cult octogenarian writer Joan Didion, Burberry counts Emma Watson, Rosie Huntington-Whiteley and Eddie Redmayne among its models, with 17-year-old Brooklyn Beckham hired to take the pictures.
Gobbetti and Philo closed more stores than they opened as they focused on making each outlet reflect the brand’s high standards. Burberry has forged ahead with new store openings around the world as it has tried to cater to Chinese demand and a shift in spending from Hong Kong to Japan.
Céline has also resisted e-commerce and digital marketing, even discouraging its runway models from taking backstage photographs to post on Instagram. In an interview with WSJ magazine last year, Gobbetti said: “We think it is important to touch the clothes. Much of what is special is lost on e-commerce.”
In contrast, under Bailey, Burberry picked up on the digital revolution early, streaming its fashion shows live and pioneering the “see now, buy now” trend, where clothes from this September’s catwalk show onwards will be available to purchase immediately online.
Luca Solca, a luxury goods analyst at Exane BNP Paribas, said Gobbetti will have to adapt quickly. “The least digital manager of all the luxury brand managers is taking over responsibility for the most digital brand and he will have to get his act together on that. Digital is the shape of things to come and I don’t think Burberry will be making a U-turn on that,” he said.
Bailey has said he led the recruitment of Gobbetti and was happy to give up his CEO title in order to secure the additional skills that Burberry needed.
Rogerio Fujimori, a luxury goods analyst at RBC Capital Markets, said: “As the luxury goods market slows down, Burberry’s story will be more focused on retail productivity and cost savings, and there were some management skills missing at Burberry.”
In their new partnership, Gobbetti will oversee the commercial, financial and operational side of the business, while Bailey will focus on creative, design, marketing and communication. They will manage strategy and the creation of their team together.
Solca said Gobbetti’s appointment might free up Bailey to focus on more exciting design ideas, something that Burberry badly needs to get the brand back on track.
But he believes that Bailey might find Gobbetti to be somewhat of a nemesis. If the British designer cannot give Burberry a creative shot in the arm, Gobbetti is likely to follow brands such as Gucci and Dior in bringing in a new designer. “Creative directors are artists and they tend to produce variations on a theme. If you listen to Sting all the time, it sounds more or less the same. If you want to have a jolt of excitement, you may have to change the artist,” Solca said.
