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Making Sense of Burberry's Big News

BoF’s Imran Amed reflects on the surprise news that Christopher Bailey is set to take on the dual title of chief creative and chief executive officer, following the departure of Angela Ahrendts to Apple.

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By
  • Imran Amed

LONDON, United Kingdom — It's not often that the fashion industry is completely taken by surprise, but today's news from Burberry was a big surprise on two fronts.

Only a month or so ago, I was chatting with Angela Ahrendts about the "connected culture" she has engendered at Burberry to help support and foster the transformation of the once overexposed and undervalued British brand into a global luxury behemoth, which, among other things, has pioneered the use of digital technology to engage with fashion consumers. That she was in discussions to make a move to Apple was not at all apparent, as Ms Ahrendts seemed genuinely committed to her Burberry journey for the foreseeable future.

Yet today came the news that Ms Ahrendts, like Yves Saint Laurent chief executive Paul Deneve before her, would be taking up a senior role at Apple, reporting to Tim Cook, the company's chief executive. That Ahrendts would take up the position of senior vice president of retail and online stores — a step down from her role at Burberry, at least in terms of title — suggests that major technology companies like Apple are an irresistible lure for talented fashion executives, even if it means they don't get the top job. Joining Apple offers Ms Ahrendts the opportunity to participate in the technology revolution in which Apple has played a pivotal role, while leveraging the retail and luxury expertise she has honed at Burberry. Indeed, Apple is constantly re-thinking the anatomy of a retail store in the digital age, when almost everything can be bought online. Who knows, it could also be a stepping stone for Ahrendts to take on an even bigger role in the future.

For Ahrendts, the move seemed to be a no-brainer, but perhaps the even more surprising news is that Christopher Bailey is set to take on the dual role of chief creative and chief executive officer of Burberry. It is unprecedented for a designer to graduate from creative director to chief creative officer to chief executive officer, as Bailey will have done when the transition is complete. That the Burberry board made this latest appointment shows the immense confidence the company has in his abilities and commitment to the company, but it does beg the question whether any single human being, even if they are superhuman, can possibly handle both roles.

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Of course, brands like Giorgio Armani and Tom Ford are effectively run by Mr Armani and Mr Ford, who look after both the creative and commercial sides of their businesses, but these are closely held, private companies that do not have to answer to the public markets. Can Mr Bailey, someone who is not obviously au fait with the dollars and cents of balance sheets, intricacies of global supply chains and the excruciating detail of retail operations, run a multi-billion dollar creative business in every sense of the word and also communicate with analysts on Wall Street and in the City of London? Will Mr Bailey be able to effectively answer questions about both the creative direction of the company as well as its financial performance?

Steve Jobs did it, of course. But most people would agree there are very few men like Steve Jobs. With the support of a first-class team, he was able to wow consumers and financial markets with his compelling and, at times, visionary presentations.

Could Mr Bailey be the Steve Jobs of fashion?

The stock markets don't seem to think so. Burberry's share price had plummeted by more than seven percent by the close of trading in London today, even after the company reported 17 percent growth in revenues in the six months to the end of September, ahead of consensus analyst expectations.

Ms Ahrendts' truly committed demeanour in our interview in August, the unexpected nature of the announcement, and the choice of Mr Bailey to succeed her all suggest to me that this has come as a big surprise to the Burberry board, which, from an outsider's perspective, seems to have decided very quickly on what to do after Ms Ahrendts' announced her plans to leave. I couldn't help but notice that Mr Bailey looked a little outside of his comfort zone in the video released by Burberry today (above).

While he has played an integral role in the transformation of Burberry, there remain big questions — notwithstanding his obvious creative talent — about his ability to shepherd this business forward without the partner who has stood by him to write one of the greatest turnaround stories in fashion history and fluently communicate that vision to the world. This is especially important when you are running a company that is carving new paths and operating in a market that is in constant flux.

If I was a shareholder of Burberry today, I would be watching this space very closely, with my mouse very close to the sell button.

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