Burberry: Celine boss to replace Christopher Bailey as chief
Burberry has replaced Christopher Bailey as chief executive after a turbulent two years running the fashion company.
Marco Gobbetti, who runs French luxury label Celine, will take over the role, joining the FTSE 100 group in 2017.
Mr Bailey will become president and remain chief creative officer - the role he held before also taking on the position of chief executive.
Shares in Burberry jumped almost 8% after the move was announced.
Many shareholders had been unhappy with Mr Bailey's performance as both chief executive and chief creative officer and had called for change at the top.
In May, the company reported a £29m fall in annual pre-tax profits for the year to 31 March to £415.6m and said it expected the "challenging environment for the luxury sector" would continue.
Burberry chairman Sir John Peace said Mr Bailey had done "an excellent job set against a backdrop of challenging market conditions", but had "identified the need for a new chief executive for the business who could partner with him".
Anusha Couttigane, senior fashion analyst at Kantar Retail, said that Mr Bailey excelled on product, but "pricing strategies, maximising profitability and thoroughly reviewing every aspect of the business" were not his main strengths.
Burberry shares have lost more than a third of their value over the past 12 months after sales in Asia - particularly Hong Kong - fell as Chinese consumers reined in spending. About a third of Burberry sales come from Asia.
Burberry said in May that it would reduce its product range and focus more on handbags in response to slowing sales.
The jump in the share price following the announcement put the stock on track for its best day in three years. Deutsche Bank raised its price target from £12.50 to £13.50.
Sir John said Mr Gobbetti had an outstanding track record of delivering growth in the luxury industry.
He has run LVMH-owned Céline since 2008 and was chief executive of Givenchy for the previous four years.
Mr Bailey said Mr Gobbetti's experience and skills in luxury and retail would be invaluable: "We are going to enjoy a wonderfully collaborative partnership that makes me very excited for our future at Burberry."
Mr Gobbetti will get a base salary of £1.1m and be eligible for an annual bonus of up to 200% of his salary. In addition, he will receive a share award for 2016/17 of up to 325% of his salary under the company's executive share plan.
He will also be awarded shares worth almost €5m (£4.25m) to compensate for those forfeited by leaving Céline. They will pay out between 2017 and 2020.
In another senior executive move, Burberry has appointed Julie Brown, chief financial officer at Smith & Nephew, to the new role of chief operating and financial officer.
The company is due to report on first-quarter trading on Wednesday.