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Is Burberry's boss under pressure?

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Burberry is thinking about hiring a senior manager to support CEO Christopher Bailey, following shareholder concerns over disappointing trading.

According to The Financial Times, the appointment could be announced later this month when Bailey delivers the results of a business review alongside preliminary results.

It is not yet known whether the position would be at boardroom level but it would put investors at ease, some of whom have reportedly been pushing for stronger leadership at the luxury goods maker.

Bailey originally joined the heritage brand in 2001 as design director under the leadership of then-chief executive Rose Marie Bravo, responsible for the brand's imagery, creative marketing and collections.

In 2009 he was bumped up to chief creative officer, extended in 2014 to the dual position of COO and chief executive — a new role that combined his existing tasks with the overall responsibility for executing Burbery's business strategy and global vision.

No-one can argue with Bailey’s creative talent, or overlook the way he propelled an iconic British brand into the digital age, but with little to none boardroom experience was he really ready for the job at the top?

And yet, despite warning on “challenging marketing conditions” in the year ahead, Bailey was paid nearly £8m for 2014-15, and is in line for shares worth up to £30m at their current price.

Some investors have been critical of Chairman Sir John Peace for appointing Bailey to the dual role in the first place, after Angela Ahrendts left to run retail and e-commerce at Apple.

“Bailey needs back-up,” one shareholder who has sold down Burberry shares in the past year told The FT. “He needs someone to help him on the marketing and retail side, who has a good understanding of the business and knows exactly where they want to take the company.”

Burberry declined to comment.

One top-20 shareholder told The FT that the brand would benefit from trying to replicate the symbiosis that had existed between Ahrendts and Bailey when she was CEO and he focused solely on the creative side.

“It worked with Christopher Bailey as head of design and Angela Ahrendts as chief executive, but there have been problems since he took up both roles after she left,” the investor said. “It is time for Sir John to move — it was his decision to give Bailey the twin role, so doubts over Bailey mean there are doubts over Sir John, too.”

Published on Friday 06 May by Veebs Sabharwal

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