Burberry COO Smith to Leave, Heaping Pressure on CEO Baileyby
Smith leaves after seven years to explore other top positions
CEO Bailey having dual roles ‘does not seem ideal’: analyst
Burberry Group Plc operations chief John Smith is stepping down, depriving Chief Executive Officer Christopher Bailey of a key lieutenant at a time when he’s already filling two of the company’s most important positions.
Smith is leaving to pursue new interests and will exit the board by summer next year, Burberry said in a statement Friday. He had been chief operating officer since March 2013, having previously served as a non-executive director. Smith said he’s exploring several leadership positions in fast-growing international businesses.
The leadership vacuum is the latest setback for Bailey, who’s grappling with subdued luxury demand and falling profits as he tries to cut costs and lift sales. A 35 percent slump in the share price in the past year has led analysts including Paul Thomas at Retail Remedy to call for the appointment of an experienced executive to work alongside Bailey, who also serves as the brand’s chief creative officer.
“John Smith retiring opens the opportunity for further changes in senior responsibilities,” said Luca Solca, an analyst at Exane BNP Paribas. “Burberry needs to go through management adjustments, as the organization based on Christopher Bailey having a dual role does not seem ideal -- and results are under pressure.”
Bailey said last month that the company had identified skills “that we need to beef up in our organization,” yet declined to provide specifics on the timing or nature of new roles.
Smith’s departure is the latest bout of management turnover in the beleaguered fashion industry, following Thursday’s move by Ralph Lauren Corp. to hire Coach Inc.’s finance chief. Struggling German suitmaker Hugo Boss AG last month promoted its finance chief to lead a turnaround effort there, while Gianni Versace SpA replaced its CEO this month, hiring Jonathan Akeroyd from Kering SA’s Alexander McQueen.
Burberry shares declined 0.6 percent to 1,084 pence at 2:30 p.m. in London.