Burberry soars after announcing this season's new leadership
Shares of Burberry shot up more than 6 percent in European trade Monday as the company unveiled a new CEO.
The British fashion holding company appointed Marco Gobbetti as chief executive officer. Gobbetti is the current chairman and CEO of Celine, a French luxury brand owned by LVMH group. He's set to join the board in 2017.
Christopher Bailey, current Burberry CEO who took over when Angela Ahrendts left for Apple, will transition to president and chief creative officer. Julie Brown will take over as chief financial officer.
Bailey balanced the role of chief creative officer and CEO for two years amid a slump in luxury retail. The British retailer announced disappointing earnings last quarter, citing headwinds in Hong Kong and overall struggles in the sector. Burberry announced share buybacks and a cost-cutting program after reporting a 10 percent dip in adjusted profit last quarter.
"The Board firmly believes that these new leadership roles coupled with actions, identified in the recent business review, will significantly enhance our ability to deliver long-term sustainable growth and sector out performance over time," Burberry Chairman Sir John Peace said in the statement.
Burberry's stock, listed in Great Britain, traded near $12.12 on Monday. Shares fell from the earlier pop, trading about 4 percent higher by the European close.
"This is a step forward for Burberry, where we perceived a need of reinvention and stronger direction," Exane BNP Paribas analyst Luca Solca told Dow Jones.