Burberry (LON:BURB) have announced that their creative director and former CEO, Christopher Bailey, is set to leave the brand next year.
Mr Bailey, was chief executive of Burberry from 2014 until July of this year, when he assumed his current role as chief creative of the brand and was replaced by Mr Marco Gobbetti .
Mr Bailey’s renumeration has been a source of contention with shareholders, who became concerned over the company’s performance under his leadership.
During the summer, a third of shareholders voted against proposed a pay package that included £5.4 million for Mr Bailey. He was subsequently awarded £3.5 million instead.
For this financial year he is set to earn £7.6 million, including share awards.
Bailey has been with the iconic brand, famed for its trench-coats, for 17 years and its chief creative designer since 2009.
In recent years, the luxury British designer has felt the pressure of fierce competition within the fashion industry, having reported a fall in annual profits for the 2016 financial year.
As a consequence, Burberry is in the midst of an ambitious turnaround plan in which it plans to save at least £100 million by 2019.
Bailey’s departure will potentially give the brand an opportunity to revitalise itself under the direction of Mr Gobbetti, who joined from french house Celine.
Overall, Burberry’s sales have shown some improvement this year. For the three months to June, retail sales grew 4 percent to £478 million, boosted in particular by strong growth in China.
It remains to be seen whether Bailey’s departure will indeed kick-start growth for the company amid a persistently tough retail climate. Bailey has been credited with
“Look at the value of Burberry and deduct everything that is tangible assets,” commented Rogerio Fujimori, an analyst at RBC Capital Markets.
“Obviously the value of the brand is the biggest component. It’s difficult to figure out [how much of that] is Burberry and what is Christopher Bailey’s contribution.”
Shares in Burberry are steady, down 0.37 percent as of 13.41PM (GMT).