Marco Gobbetti has quit as the chief executive of the luxury fashion brand Burberry after almost five years in the role.
The British fashion brand said Gobbetti – who was charged with turning around the business when he took the reins in 2017 – was leaving for a job in Italy that would allow him to be closer to his family. The luxury Italian group Salvatore Ferragamo, famous for making shoes worn by Hollywood stars such as Audrey Hepburn, announced on Monday it had appointed Gobbetti as its new chief executive.
Burberry shares fell by 8.7%, wiping almost £800,000 off the value of the company, making it the biggest faller on the FTSE 100.
The Burberry chairman, Gerry Murphy, credited the outgoing chief executive with leading the transformation of the brand and business.
Murphy said: “The board and I are naturally disappointed by Marco’s decision but we understand and fully respect his desire to return to Italy after nearly 20 years abroad. With the execution of our strategy on track and our outlook unchanged, we are determined to build on Burberry’s strong foundations to accelerate growth and deliver further value for our shareholders.”
Gobbetti, a luxury goods veteran who led brands including Céline, Givenchy and Moschino before joining Burberry, is expected to stay in the role until the end of 2021, giving the company time to find a successor.
The move means the chief executive will lose all of his unvested share awards, which will lapse in full when he leaves Burberry at the end of the year.
The 62-year-old, who earned £4m in shares as part of a golden handshake when joining the business, was paid £180,000 through Burberry’s employee share plan last year. It took his total pay to £2.3m, even after giving up 20% of his salary for three months at the height of the Covid-19 crisis in 2020.
“With Burberry re-energised and firmly set on a path to strong growth, I feel that now is the right time for me to step down,” Gobbetti said in a statement.
“I have every confidence that the creativity and strong values that define Burberry will continue to drive the company’s future success.”
The exit of Gobbetti is likely to prompt fears of a risky change in strategy or that he could be followed out of the door by Burberry’s creative head, Riccardo Tisci, particularly as Ferragamo is lacking a creative director.
In 2018, Gobbetti brought in Tisci to Burberry, having previously hired him at the luxury brand Givenchy. Together the pair have overseen a complete overhaul of Burberry’s fashion look, bringing in a new monogram and referencing an edgier streetwear aesthetic alongside its traditional trench coats.
Gobbetti took the brand more upmarket, pulling out of the less luxurious department stores and cutting jobs at head office and in stores to improve efficiency and free up cash for more digital marketing. The Italian’s manoeuvres led to a 35% rise in Burberry’s share price from when he took over as chief executive in July 2017 and the end of last week – despite the effects of the pandemic.
Russ Mould, the investment director at AJ Bell, said the fall in the share price on Monday’s announcement showed investors were disappointed at his exit, but added: “Investors must always resist the temptation to fall for the ‘cult of the CEO’ because one person cannot do everything at a firm, no matter how driven or talented.”
Luca Solca, a luxury goods analyst at Bernstein, said: “Burberry is in a far better position today than when [Gobbetti] took responsibility for it. Yet, the magnitude of the issues at hand didn’t offer a chance for the runaway success that some had hoped for.”
He said there was “opportunity and risk” ahead for the brand. “We expect the market to pause and enter a ‘show me’ mode on Burberry, waiting to know who the new CEO will be and his or her plans.”
Gobbetti’s departure comes at what is a tricky time for Burberry and other luxury brands, as sales have been hit by restrictions on international travel and high street lockdowns during the coronavirus pandemic.