LONDON, United Kingdom — Burberry has named Riccardo Tisci its new creative officer, effective March 12, 2018. Tisci succeeds Christopher Bailey, who announced his departure in October 2017 after 17 years with the company.
Tisci joins the British megabrand after more than a decade as creative director at Givenchy, where he is credited with resurrecting the LVMH-owned couture house with his dark, sensual and subversive collections. The Italian designer left the brand on January 31, 2017 when his contract ended. He was replaced by Clare Waight Keller.
In his new role, Tisci will be based in London and direct all of Burberry’s collections, presenting his first outing for the brand in September 2018. The announcement sent the company's share price up more than five percent.
"Riccardo is one of the most talented designers of our time. His designs have an elegance that is contemporary and his skill in blending streetwear with high fashion is highly relevant to today's luxury consumer. Riccardo's creative vision will reinforce the ambitions we have for Burberry and position the brand firmly in luxury,” said Marco Gobetti, Burberry’s chief executive who joined the company on July 5, 2017, from LVMH-owned Céline.
"I have an enormous respect for Burberry's British heritage and global appeal and I am excited about the potential of this exceptional brand,” added Tisci. “I am honoured and delighted to be joining Burberry and reuniting with Marco Gobbetti.”
Indeed, this is not the first time Tisci and Gobbetti have worked together. Gobetti, who was previously president and chief executive at Givenchy from 2004 to 2008, was responsible for hiring the designer, who was then relatively unknown. Tisci breathed much-needed life into Givenchy's womenswear, menswear and accessories.
Since joining Burberry in 2001, Bailey worked with former chief executive Rose Marie Bravo and her successor Angela Ahrendts to save the British stalwart — best known for its classic, durable trench coats — from a period of brand dilution.
During his tenure, Burberry became a new star of the global luxury industry. By 2011, the company was generating £1.5 billion in revenue — a 27 percent increase over the previous year — with a market capitalisation of £5.8 billion. That was twice the rate of growth of LVMH’s revenue and market value over the same period. At the same time, Burberry gained recognition for its digital savvy. But it’s no secret that in recent years Burberry has struggled to maintain its momentum, with the company’s sales growth lagging its peers.
Taking Burberry Upmarket
Last November, Gobbetti outlined an ambitious three-pronged plan to elevate the British brand's positioning, placing the label “firmly in the luxury segment, the most enduring and rewarding part of the industry.” As part of the strategy, Gobbetti plans to enhance the brand’s leather goods offering, bring greater newness to its collections, tighten distribution by scaling back its lower-end wholesale partnerships, refresh stores and use its reputation as a digital innovator to better communicate its new product offering.
“By re-energising our product and customer experience to establish our position firmly in luxury, we will play in the most rewarding, enduring segment of the market,” Gobbetti said in a statement that coincided with the announcement of first-half results for the 2017 fiscal year.
Burberry is betting that Tisci's expertise in elevating casual wear to high-fashion status will increase the label's relevancy amongst luxury consumers, according to a source close to the brand. (Burberry has already entered the streetwear category with conviction, unveiling a partnership with skater-inspired label Gosha Rubchinskiy for Spring/Summer 2018.) It's a strategy with validity: High-end streetwear helped boost global sales of luxury personal goods by 5 percent this year to an estimated €263 billion, and the sector is projected to grow 5 percent through 2020, according to a report from consulting firm Bain & Co.
“The contemporary street style orientation of Riccardo Tisci is a great match to relaunch the image of Burberry,” wrote Mario Ortelli, senior analyst of luxury goods at Stanford C. Bernstein, in a note. “We believe that Burberry’s management will try to emulate the action plan of Gucci.” This includes the clearance of previous collections in the next two to three quarters; launching new campaigns and initiatives; presenting an impactful and bold collection at London Fashion Week in September; extend the new style to other product lines and lowering price points to reach a wider consumer base; and renewing the store network progressively.
The main questions now, said Ortelli, are whether Tisci’s style will resonate among industry insiders and opinion makers, and if Burberry’s management will be able to manage the pace of its new action plan. “A star designer like Riccardo can have demanding requests about the new store format and the timing to deploy it,” he added.
Financial analysts were tough on Gobbetti when he presented Burberry’s third-quarter results in January 2018. Retail revenue was £719 million in the three months to December 31, 2017, down from £735 million in the same period in 2016. The company said retail revenue was up 1 percent on an underlying basis, while comparable store sales rose 2 percent, below analysts’ expectations.
Comparable store sales grew by a mid-single figure percentage in Asia Pacific and mainland China, and by a low single digit in the Americas. However, they fell by a low single figure in its Europe division, hurt by a larger fall in the UK.
Tisci left his hometown of Taranto in southern Italy to study at Central Saint Martins in London, graduating in 1999. In September 2004, he set up an eponymous ready-to-wear label, showing his first collection in Milan for the Autumn/Winter 2005 season. The show caught the attention of Gobetti, who hired Tisci to replace Julien Macdonald as creative director of Givenchy in February 2005.
Bailey will step down from Burberry’s board on March 31, 2018.