Burberry Faces Double Challenges Facing Vacancies

Placed in the UK luxury brand

In front of it is the performance mire and the double challenge of the vacancy of the creative director.

According to the world clothing and shoe net, a few days ago, Burberry CEO Marco Gobbetti said in the conference call after the group's third quarter report was released that the replacement of the current creative director Christopher Bailey has not been determined yet, but it is hoped that the successor will be able to stay at Burberry for at least 10 years.

Create new core products.

It is reported that Christopher Bailey will withdraw from the Burberry board in March 31st.

The picture is Buberry creative director Christopher Bailey.

This has also prompted a number of media reports that Phoebe Philo had no doubt that it was about to join Burberry.

Now the candidate is full of uncertainty.

There are people in the industry who are expected to leave LV.

Kim Jones, Phoebe Philo, Riccardo Tisci, AlberElbaz, Tomas Maier and Stuart Vevers are likely to become the successors of Maier.

However, this uncertainty is not good for the current stage of Burberry.

Rogerio Fujimori of Royal Bank of Canada says that the successful case of luxury brands usually requires a strong creative director to work closely with CEO, so Burberry's empty window period in creative direction is useless for brand performance and capital market performance.

Especially in the industry's general competition agreement, some newly appointed creative directors can not immediately join the next one.

He stressed that the change of creative director will also bring confusion in the pition stage. This fear of uncertainty will be wrapped around the brand this year.

Replacing the creative director is a dangerous move.

In fact, according to the latest earnings data, Burberry (LON:BRBY) still seems to be out of the mire of performance.

In the three months ended December 31st, Burberry retail sales fell 2% to 719 million pounds compared with the same period last year. The growth rate at real time exchange rate increased by 1%, much less than the 22% increase in the same period last year, while the same store sales growth rate was 2%, lower than that of the same period last year, which is not as good as analysts expected.

As for the decline in sales, Burberry explained in its earnings report that it was mainly affected by most wealthy consumers who chose to travel outside the UK during the holidays and purchase other high-end luxury goods.

Marco Gobbetti said its high-end luxury brand strategy was making good progress last year and is expected to achieve its profit target in the 2017 fiscal year.

After the release of the earnings report, Burberry opened a 7.11% price drop on that day.

Obviously, the capital market is not satisfied with the performance of the brand, and in the next few days, the empty window of creative direction has failed to let investors see the considerable prospect.

In November last year, Marco Gobbetti resolved to reform its brand in the first half of Burberry.

He stressed that despite its efforts in recent years, Burberry has been steadily gaining ground in the global luxury industry, but it is still in a passive position in the industry. The future brand will focus on high-end luxury goods, which means that the group will begin to cut off the non luxury sector and business.

The picture shows the stock price movements of Buberry in the past three months.

For Marco Gobetti's strategy, investors did not buy it. Burberry shares fell 13% on the same day, the largest decline in five years.

Due to the delay in the emergence of new core products, Burberry is fading away from the pursuit of fresh young consumers.

In a report released last May by UBS UBS, the price of Burberry handbags was about 14% lower than that of similar luxury handbags, and Burberry still had room to raise prices in this category.

As for the changing status of Burberry, there are concerns about whether Burberry will become another Mulberry.

However, Berenberg analysts say that Albert Frere's holdings of shares are positive, or will become a catalyst for Burberry to regain investor confidence.

Due to continued decline in performance, Burberry has been reported to be a potential target for many years.

In 2013, luxury analysts and investment banking analysts said that LVMH had considered buying Burberry. In 2014, a list of European potential acquired company presented by UBS analysts was listed in Burberry.

Now, Burberry needs a strong turning point. Some analysts believe that the process of seeking creative directors and the running in period will lead to a consumption of brand.

Marco Gobbetti must spend time carefully finding the right creative director, and the new creative director takes longer to introduce his new ideas and relocate products.

Luca Solca, head of Paris bank, also said that finding a creative director who can match Christopher Bailey and write a new chapter for Burberry will be the key to medium term investment opportunities.

Even in the best case scenario, Burberry's turnaround takes time.

Gucci CEO Marco Bizzarri successfully found a potential candidate, from appointing to achieving business returns also need to wait for 18 months.

Julian Easthope and Julie Zhuang of Barclays Bank believe that no matter how long it takes, Burberry plans to find the best candidate.

This also means that time will become the risk cost of Burberry.

All the pressure is concentrated on Marco Gobbetti CEO.

More interesting reports, please pay attention to the world clothing shoes and hats net.