Burberry Group Plc chose Jonathan Akeroyd from Italian fashion house Gianni Versace SpA as its new chief executive officer, tapping a proven turnaround expert to continue the trench coat maker’s push to become a top-tier luxury label.
Akeroyd, a 54-year-old Briton who led the revival of Alexander McQueen before taking over at Versace, will join the British brand in April. He’ll replace Marco Gobbetti, who is leaving to run Salvatore Ferragamo SpA.
Akeroyd would earn an annual salary of 1.1 million pounds ($1.5 million) plus bonuses, and would be granted cash and share payments worth about 6 million pounds for incentives he forfeits at Versace, Burberry said.
The appointment ends months of uncertainty at the 165-year-old group, which had been searching for a replacement for Gobbetti since June, when he announced his shock departure mid-way into a multi-year turnaround plan to take the brand further upmarket.
Akeroyd will take over in the midst of a turnaround at Burberry, with Gobbetti’s plan to elevate the label’s image showing progress but still incomplete. In the past, the fashion house was seen as a mid-market luxury brand, lacking the diversification of industry giant LVMH, whose products range from Louis Vuitton bags to Dom Perignon Champagne.
Shares in Burberry, which have extended losses since the announcement of Gobbetti’s departure and were trading down 19 per cent on June levels, were up slightly on Wednesday.
Burberry, known for its trench coats, trademark plaid and TB monogram, said Akeroyd, a 54-year-old Briton, was the right choice to build on its creative heritage.
“Jonathan is an experienced leader with a strong track record in building global luxury fashion brands and driving profitable growth,” Burberry Chair Gerry Murphy said.
Akeroyd accelerated growth during his five years at Italy’s Versace and oversaw the sale of the house, known for its opulent, ostentatious style, to US group Michael Kors, now known as Capri Holdings, in 2018.
Versace’s revenues rebounded in the latest quarter reported, with revenue of $240 million up 158 per cent year on year and a return to profit after the Covid-19 impact a year earlier.
However, its pre-pandemic annual sales of $843 million are still well below a $2 billion target set by Capri for the brand.
Akeroyd, who ran Alexander McQueen from 2004 to 2016, led the brand through the turbulent period following the death of its eponymous founder in 2010, tapping Sarah Burton as creative director. The label got a public boost when Kate Middleton wore an Alexander McQueen dress for her wedding to Prince William the following year. Akeroyd also led an extensive store expansion.
“He did the groundwork that allowed Alexander McQueen to take off,” said Luca Solca, an analyst at Sanford C Bernstein.
Berenberg analysts said Akeroyd had “lots of luxury CEO experience of leading houses — as well as brand turnarounds”.
But UBS analysts were more solemn in their note. “The timing of his start date suggests Burberry is unlikely to present an updated strategy until Q3/Q4 2022 at the earliest, thus delaying its turnaround even further,” they wrote.
Like other luxury brands, Burberry was hit by Covid-19, but it has recovered, driven by demand in Asia.
It said in July its like-for-like sales had risen above pre-pandemic levels, driven by new, younger fans of Riccardo Tisci, the designer who Gobbetti brought in to revitalise the brand and who investors are relieved is staying put.
Gobbetti’s departure was described as a personal decision to return to Italy, where he will lead the Italian luxury goods group Ferragamo.