Burberry Group is getting a new CEO as the luxury retailer seeks a turnaround amid slumping revenue and profit and a downturn in China.
Marco Gobbetti, currently CEO of French luxury brand Céline, will take over the top role at Burberry from Christopher Bailey, the company announced Monday.
Investors applauded the shakeup, driving up Burberry shares 5.9% to 1,231 pounds at 9:32 a.m. ET, or $1,599.04.
Bailey, whose compensation tumbled 75% in the last fiscal year as the company encountered market turbulence, will become president and chief creative officer when the transition takes effect sometime in 2017.
Both executives will report to Burberry chairman Sir John Peace.
The company also announced Monday that Julie Brown, currently chief financial officer of medical tech company Smith and Nephew, will be appointed to the new role of chief operating and financial officer.
The shakeup comes after the company's total revenue fell less than 1% to $2.9 billion in the fiscal year ended March 31, while operating profit slipped 8.5% to $457 million.
"The moves are part of the ongoing business review that is targeting future growth opportunities in retail, product and digital enabled by changes to ways of working," Burberry said in a statement.
The company's Asia Pacific division is undermining the bottom line, with "significantly lower" foot traffic in the key Hong Kong market denting revenue, according to Burberry's annual report.
Gobbetti, who has led Céline since 2008, previously served as CEO of Givenchy and CEO of Moschino.
His compensation will include a base salary of 1.1 million euros, currently translating to about $1.2 million. He will also get a maximum annual bonus of twice his salary, a 2016-17 executive stock compensation bonus of up to 3.25 times his salary, pension benefits and a signing bonus of restricted shares currently worth 4.91 million euros, vesting from 2017 through 2020.
"I am delighted that Marco will be joining us to work alongside Christopher in his new role as we embark upon the next chapter in our 160-year-old success story," Peace said. "He has an outstanding track record of delivering growth in the luxury industry and his vision for the sector and how it will evolve is extremely impressive."
Burberry chief Christopher Bailey had received 1.89 million euros or $2.1 million, in total compensation in last fiscal year, compared with 7.5 million euros in the previous year.
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