BURBERRY lost £770m off its stock market value yesterday after the luxury group announced that chief executive Angela Ahrendts will be stepping down.
Ahrendts, a 53-year-old American who has been at the helm of the luxury group since 2006, will leave in the middle of next year – swapping her London offices for Silicon Valley to become senior vice president for retail and online stores at Apple.
Christopher Bailey, who has been at Burberry for 12 years, will take her place and retain his role as chief creative officer – an unusual dual role that unnerved investors yesterday given Bailey’s lack of experience running a company.
However finance director Carol Fairweather dismissed these concerns. “Christopher has got a great team beneath him in terms of the creative team and in terms of the management team,” she argued.
Citigroup analysts noted that Bailey’s dual appointment was “interesting” but not unusual in the fashion industry and argued that it showed “a strong commitment to the firm where he has worked since 2001”.
Fairweather denied it had been a rushed appointment and insisted Bailey “had always been the preferred successor”.
Ahrendts, a former executive of US fashion house Liz Claiborne, is credited with steering Burberry upmarket and growing it into a globally recognised brand.
Her departure means there are now just two female chief executives – Carolyn McCall of EasyJet and Alison Cooper of Imperial Tobacco – in the FTSE 100. However, Royal Mail boss Moya Greene is likely to join them later this year when the newly-listed postal firm enters the FTSE in December’s reshuffle.
In its half-year trading update yesterday, Burberry said retail revenue rose 17 per cent to £694m in the six months to 30 September, in line with analysts’ forecasts. Total revenue was £1.03bn, up 14 per cent, but wholesale earnings fell seven per cent.