Burberry names Versace's Akeroyd as new chief executive

Paris

BURBERRY Group named Jonathan Akeroyd, a turnaround expert who has led the Italian fashion house Gianni Versace for almost 6 years, as its new chief executive officer (CEO) as the trench-coat maker seeks to complete its transformation into a top-tier luxury label.

Akeroyd, a 54-year-old Briton who previously led the revival of Alexander McQueen before taking over at Versace, will join the British brand in April. He will replace Marco Gobbetti, who is taking the helm at Salvatore Ferragamo.

Akeroyd will take over at the iconic British trench-coat maker in the midst of a turnaround, with Gobbetti's plan to elevate the label's image showing progress but still incomplete.

In the past, Burberry 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.

"We see the Jonathan Akeroyd as a solid CEO appointment," said Luca Solca, an analyst at Sanford C Bernstein. "It is important that Burberry appoints an executive with strong commercial and marketing skills." Burberry shares traded 0.8 per cent higher early on Wednesday (Oct 20) in London.

Akeroyd also held senior roles at the luxury department store Harrods in London. At Burberry, he will work with Italian designer Riccardo Tisci, who was brought in by Gobbetti from Givenchy.

Burberry will operate without a CEO in the first quarter of next year, since Gobbetti is stepping down on Dec 31. Chairman Gerry Murphy will be in charge of the executive committee during that time, the company said.

The company had searched for a new CEO since announcing in June that Gobbetti would leave after more than four years running the brand.

The company has been reducing discounts in order to better control its pricing strategy. It is also making targeted investments with the opening of a new flagship store on Sloane Street in London in July, the same area where founder Thomas Burberry opened its first shop 130 years ago. Three more flagships are set to open - in Shanghai and Paris as well as another one on London's Bond Street.

During his tenure, Gobbetti purchased an Italian leather-goods maker to develop Burberry handbags. His successor may have to keep focusing on this category, which is considered crucial for luxury groups such as LVMH or Hermes International since it has weathered the pandemic better than ready-to-wear or some make-up products such as lipstick. Burberry has been widening its bag offering with the launch this year of its Olympia leather bag, in a campaign featuring influencer Kendall Jenner.

Another focus will be investing in digital capabilities with more consumers shopping online, a trend that accelerated with lockdowns.

Akeroyd will also have to keep navigating environmental, social and governance (ESG) concerns coming from investors but also consumers - worries that quite often can irk China where a lot of luxury groups' growth comes from.

Under Gobbetti, Burberry took the decision to stop the use of real fur and ended the practice of destroying unsaleable products, a move once done to preserve the scarcity of luxury products. BLOOMBERG