Burberry is losing a key member of its management team after John Smith, chief operating officer, announced plans to step down next year.
Smith, who said he was leaving to pursue new interests, is understood to be seeking a chief executive post after seven years at the fashion retailer. He will work out his 12-month notice period.
“With the company’s future strategies now in place, I am ready to embark on a new challenge. Having been the CEO of a fast-growing international business in the past, I am exploring a number of exciting new leadership opportunities in that arena,” said Smith who was chief executive of BBC Worldwide from 2004 to 2012.
Smith’s exit comes as Burberry faces pressure to bolster its senior management team with retail and digital expertise amid poor trading figures. Investors have raised concerns that Christopher Bailey, the chief executive and chief creative officer, is struggling to cope with his joint role, which he moved into after the departure of former chief executive Angela Ahrendts in 2014.
The company, famous for its trenchcoats, admitted profit was likely to come in towards the bottom of market forecasts in the year to March 2017, amid investment in staff training and IT and a sharp slowdown in China, the retailer’s biggest market.
Announcing Burberry’s annual results in May, Bailey acknowledged that the company needed to bring in more expertise to help improve performance. He would not comment directly on rumours that he was seeking a right-hand man or woman, but said: “We acknowledge that there’s a lot going on in the company and there’s great change … We have identified skills we need to beef up in the organisation.”
Smith’s departure is likely to raise concerns about a further loss of top-level management expertise. It is understood that Burberry is considering whether to replace him or rejig its management structure as part of its existing plan to support Bailey.
One source said: “There’s time. No one is not coming into work on Monday. Any transition will be managed carefully.”
Luca Solca, a luxury goods analyst at Exane BNP Paribas, said the departure of Smith cleared the way for a potential restructure at Burberry that could bring in a digital and retail boss in a role similar to the one Ahrendts holds at Apple.
“Burberry needs to go through senior management adjustments, as the organisation based on Chris having a dual role does not seem ideal and results are under pressure. John Smith retiring opens the opportunity for further changes in senior responsibilities,” said Solca.
The company and Smith said his departure was not linked to any plans to hire a new retail boss.
Bailey said: “John has made a significant contribution to Burberry over the last seven years. I have personally valued and enjoyed John’s partnership and I would like to thank John for everything he has brought to Burberry.”
The chairman, Sir John Peace, added: “We would like to thank John for his contribution to Burberry over the last seven years, first as a non-executive director and latterly as chief operating officer, and, in particular, for his success in driving digital growth and optimising the potential of our beauty and travel businesses.”
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