Posted Sep 28, 2022, 4:12 PMUpdated on Sep 28, 2022 at 4:13 p.m.
The departure of Riccardo Tisci, artistic director of British fashion locomotive Burberry, was made official on Wednesday. But the rumor circulated a few days earlier during the parade of ready-to-wear brand with a beautiful heritage dating from 1856 and which weighs 3.34 billion euros, according to analysts. It is the only British luxury player that plays in the big leagues, but it has been looking for new momentum since the unexpected departure in July 2021 of its ex-CEO Marco Gobbeti, who left to join Italy and especially the competition by taking the lead. from Ferragamo. Investors then feared an imminent departure of Riccardo Tisci as the two men had embodied a creative / manager duo whose luxury has the secret.
Recovery plan announced in November
The departure of Riccardo Tisci, replaced by Daniel Lee, former artistic director of Bottega Veneta, comes at a time of internal turbulence. CFO Julie Brown has announced her resignation to join the pharmaceutical industry.
Tisci having worked for five years, it is a page that turns. The brand has seen a good recovery since the pandemic but it is not among the luxury “rockets”, those showing a clear recovery since 2021. Burberry is medium-sized in luxury and under pressure from the London Stock Exchange. It is less profitable than others: “Burberry has an operating margin of around 20%, much lower than that of its competitors,” notes Thomas Chauvet, analyst at Citi. He recalls that Burberry has however effectively repositioned its offer in leather goods (20% of its sales), an activity known for its profitability. The brand with the iconic trench coat remains primarily a ready-to-wear player (60% of its turnover), an activity less profitable than bags and accessories.
Leather goods will be a key element
The work done by Gobbeti had been hailed for the transformation of its network, “well cleaned” notes an expert. The new positioning of its products ensured its move upmarket at the same time as digitization. Burberry has also successfully entered the sneakers category, which has enabled it to attract a younger and more trendy clientele. The pandemic and particularly the slowdown in China had an impact on its activity. Jonathan Akeroyd, its CEO since March, indicated before the summer that he would detail on November 17 during the half-year results his plan to accelerate the group’s growth. This meeting is now highly anticipated. Daniel Lee will join the luxury group on October 3. His asset is his experience in fashion and leather goods. The Burberry action reached 4% at midday on the London Stock Exchange.
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