Burberry Shares Climb as Company Confirms Early Arrival of New CEO
LONDON — Burberry shares were up Thursday following the brand’s positive third quarter update earlier in the week, and confirmation that the new chief executive officer, Jonathan Akeroyd, would arrive two weeks ahead of schedule, in mid-March.
Shares rose 2.4 percent to 19.12 pounds in late-day trading, outpacing the FTSE 100 index on the London Stock Exchange, which was broadly flat.
The company said Akeroyd has agreed to start at Burberry on March 15, rather than April 1.
As reported in October, former Versace CEO Akeroyd is returning to the U.K., taking the top job at Burberry. He succeeds Marco Gobbetti, who has left the British brand to become CEO of Salvatore Ferragamo.
Gerry Murphy, chairman of Burberry, has described Akeroyd as “an experienced leader with a strong track record in building global luxury fashion brands, and driving profitable growth. He shares our values and our ambition to build on Burberry’s unique British creative heritage and his deep luxury and fashion industry expertise will be key to advancing the next phase of Burberry’s evolution.”
Akeroyd will report to Murphy, and the board. Murphy has been acting chair of the executive committee since Gobbetti revealed his departure.
Financial analysts covering Burberry have been speculating about Akeroyd’s plans, and where he plans to focus his energy.
In a research note released on Thursday, Barclays said there were “limited insights” on Akeroyd’s agenda during the Burberry analyst presentation on Wednesday.
The bank said that according to Julie Brown, Burberry’s chief operating and chief financial officer, “Akeroyd’s top priorities will likely be around the brand, the product and customer experience, which doesn’t really come as a surprise. The level of details on his agenda remains naturally quite vague at this stage, which make us believe that there could still be some disruptive changes ahead.”
In his Burberry report, titled “Q3 Better: Waiting for Jonathan,” Flavio Cereda of Jefferies said that given Akeroyd’s imminent arrival “we were not expecting any meaningful changes in strategy.”
As reported, Burberry’s retail revenue rose 5 percent to 723 million pounds in the third fiscal quarter ended Dec. 25. At constant exchange, growth in the period was 8 percent.
Comparable store sales rose 7 percent on last year, but fell 3 percent compared with two years ago, due to the company’s planned exit from markdowns in stores and online. Full-price sales were up 15 percent year-on-year, and 26 percent compared with two years ago.
During a series of presentations following the results, Brown noted that over the past years the “quality” of the Burberry business has improved, with increasing numbers of consumers now paying full price for Burberry merchandise.
Brown said that all product categories delivered double-digit growth in the quarter with outerwear, leather goods and digital performing particularly strongly.
