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Shares of the London-listed luxury fashion house Burberry tumbled Monday after it announced CEO Marco Gobbetti will depart at the end of the year to lead Italian rival Salvatore Ferragamo.
Burberry stock traded as much as 8 percent lower Monday morning on the news, while shares of Ferragamo were little changed.
Gobbetti previously led European luxury brands including Céline and Givenchy before taking the reins at Burberry in 2017.
“The Board and I are naturally disappointed by Marco’s decision but we understand and fully respect his desire to return to Italy after nearly 20 years abroad,” Burberry’s chairman, Gerry Murphy, said in a statement.
Gobbetti is credited with helping turn Burberry around by raising prices, appealing to younger shoppers and increasing the company’s exposure in higher-margin products like handbags.
Gobbetti brought in Italian designer Riccardo Tisci in 2018 to help revamp the brand and offer more upscale streetwear offerings.
But Burberry also found itself at the center of controversy at times under Gobbetti. The fashion house reportedly burned more than $36.5 million worth of unsold inventory in 2017. The following year, the company said it would end the practice.
Shares of Burberry have nearly doubled over the past five years, but the stock has still lagged its luxury retailer peers like LVMH and Kering in recovering from the pandemic.
Ferragamo, made famous for its shoes sported by Hollywood stars like Audrey Hepburn, said Gobbetti would assume his new role “as soon as he is released from his contractual obligations.”
At the Italian luxury retailer, Gobbetti will likely again find himself in the midst of a turnaround. The brand has struggled to remain relevant in the age of social media fashion.
Ferragamo did not say what will happen to its current CEO Micaela Le Divelec Lemmi, who’s been in the role for almost three years. The board will meet July 1 “for the necessary formalities,” the company said.
Gobbetti said he will support Burberry through the transition. Burberry said the board will now begin searching for a successor.
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