- Riccardo Tisci steps down after successful stint
- Daniel Lee becomes Burberry’s new creative chief
- Strategy update slated for November
British luxury brand Burberry’s (BRBY) shares were bid up 3.3% to £17.40 after the high-end fashion house announced the appointment of English fashion designer and former Bottega Veneta creative director Daniel Lee as its new chief creative officer.
Bradford-born Lee takes over from Italian Riccardo Tisci, who is stepping down after a near-five-year stint at the FTSE 100 luxury goods group, and will present his debut runway collection for Burberry at London Fashion Week in February 2023.
FRESH FACE EXCITES
Burberry’s share price rise might appear perplexing given the news the well-respected Tisci is leaving. Yet in the fickle world of fashion, trends come and go and the arrival of someone new has clearly excited investors.
Trenchcoats-to-cashmere scarves seller Burberry hailed award-winning designer Lee as ‘one of the most exciting British creative talents of his generation’. From 2018 to 2021, he was creative director at Bottega Veneta, where he helped reinvigorate the Italian luxury brand.
Lee, who has previously worked at Celine, Maison Margiela, Balenciaga and Donna Karan, said he is ‘honoured’ to join Burberry and insisted that ‘together with the team, we will write the exciting next chapter for this legendary British luxury brand, continuing its historic heritage and building on Riccardo’s legacy’.
The replacement of Tisci with Lee is the latest change to the top management team at Burberry. Jonathan Akeroyd took over from Marco Gobbetti as CEO in March, while chief operating and financial officer Julie Brown is leaving to join drugs giant GSK (GSK) next year.
BUMPY RIDE
Shares in Burberry have had volatile time of it in 2022 with investors fretting over the consumer spending outlook as well as stringent Covid-19 policies in China.
Burberry’s first quarter comparable store sales were up a meagre 1%, as trading was impacted by severe lockdowns in the Chinese mainland in the 13 weeks ended 2 July, though the brand has seen a strong recovery outside of China.
At the time of the first quarter update (15 July), new broom Akeroyd reassuringly maintained the luxury goods company’s medium-term targets of high-single digit revenue growth and 20% margins.
THE EXPERT’S VIEW
Russ Mould, investment director at AJ Bell, commented: ‘Burberry’s main challenge of late has been linked to Covid restrictions rather than whether someone likes its latest scarf or coat. Sales have suffered because of Covid lockdowns in China, one of its key selling regions. Solving that problem is currently far more important to its business than what Lee might conjure up with a pen and sketchbook.’
Mould added: ‘Tisci’s departure also begs the question if there is some unrest inside the company, given that chief operating and financial officer Julie Brown last week handed in her notice. Perhaps it’s simply a case of new chief executive Jonathan Akeroyd working out who he wants on his team and who might not fit with his strategy for the business. We’ll get an insight into what he plans for Burberry with a strategy update in November.’
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (James Crux) and the editor (Daniel Coatsworth) own shares in AJ Bell.
