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Burberry has poached the boss of Versace with a £6m “golden hello” amid a turnaround of the British fashion house into a higher-end luxury brand.
Jonathan Akeroyd, credited with the revival of the Alexander McQueen brand in the Noughties, will be joining Burberry next April.
It comes months after the surprise announcement that current boss Marco Gobbetti would be stepping back almost five years after taking the helm.
In that time, he has sought to overhaul the 165-year-old business, stopping heavy discounting and repositioning the brand as more upmarket.
“Jonathan is an experienced leader with a strong track record in building global luxury fashion brands and driving profitable growth,” Burberry chair Gerry Murphy said on Wednesday. “His deep luxury and fashion industry expertise will be key to advancing the next phase of Burberry's evolution.”
It is a phase some would argue couldn’t come soon enough. Earlier this week, London-based Burberry lost out on clinching a brand ambassador deal with Emma Raducanu - the British tennis star of the moment - who opted to partner with French fashion house Dior.
“Very excited to join this iconic house,” Raducanu posted to her more than 600,000 Twitter followers. “Thank you Dior.”
Fashion houses worldwide will have read the announcement enviously - but disappointment would likely have been most acutely felt at Burberry.
The name is Britain’s only large luxury goods brand and has fronted recent campaigns with the likes of Marcus Rashford.
“They would have wanted Raducanu,” says Mario Ortelli, managing partner of Ortelli&Co, a strategy and M&A firm specialising in luxury goods.
It is a sign there is still some way to go for Burberry’s overhaul as it also seeks to shrug off the quintessential English style for something more modern.
The departure of Gobbetti in the middle of a multi-year turnaround had spooked investors, concerned the programme could falter with his exit. Shares remain 15pc lower than June, when Burberry made the announcement.
Analysts suggest Akeroyd’s arrival might be exactly what is needed. The strategy, Jefferies analyst Flavio Cereda says, “just hasn’t been entirely successful so far”.
Despite being slightly thrown off track by the pandemic, Burberry is in a stronger position than it was in 2017 when Gobbetti joined. In July, it said financials had improved with like-for-like sales above 2019 levels.
But, there is much still to do. China, luxury’s main growth engine, presents a huge dilemma given a recent pledge by President Xi to crack down on wealth inequality, expected to hurt the world’s biggest high-end brands.
“It’s also really never quite succeeded in leather goods which is going to be a challenge,” says Jefferies’ Cereda.
These are things Akeroyd will have to tackle, and analysts have faith in his ability. A long wait for him to join, however, sparked grumblings that investors may have to wait until the end of 2022 for updated plans to be laid out.
He’s a “good appointment”, says Cereda. “He did excellent work when he was at McQueen, he’s a Brit but he knows Italy very well and he knows the sector, so he does tick a lot of boxes.”
Akeroyd’s experience in turning around Alexander McQueen will likely prove most valuable. In his tenure between 2004 and 2016, he relaunched the brand and propelled it to profitability.
His appointment of Sarah Burton as creative director in 2010, after the death of Lee Alexander McQueen, was a “remarkable” move, Cereda says. Burton later went on to design Kate Middleton’s wedding dress.
Akeroyd may be looking to emulate such an appointment at Burberry, when he will be working alongside Italian designer and chief creative officer Riccardo Tisci.
While Tisci has been instrumental in helping Burberry shed some of its “heritage” style, saying earlier this year it had become “much more sexy, much more lightweight”, his direction has attracted some criticism.
Some say Burberry is simply underperforming in leather goods, with the team yet to produce a “must-have” bag.
A high task, however - this could have been expected. “Creating an IT bag is a mixture between science and magic,” says Ortelli. “If you think even of a brand like Hermes, they’ve got two iconic bags, but all their other bags did not have this same magic. But it will clearly be a priority for the new CEO.”
Tisci has also struggled to shrug off criticism he has stripped the brand of some “Britishness” - partly blamed by the fashion industry as a reason for Burberry not drumming up as much customer appetite in the US and Europe as it has in China.
“Burberry has become global, Burberry has become [gender] fluid, Burberry has become approachable,” Tisci recently said. “We have had to educate people that Burberry is not [just] a winter company.”
It seems Burberry is still in that process. The brand’s repositioning still has some way to go and it may be some time before Akeroyd makes his mark.
But the appointment of a new boss - one with turnarounds already under his belt - can only be a good thing.