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Last updated: February 7, 2013 10:53 pm
Stacey Cartwright, finance director of Burberry, is quitting the group in a boardroom shake-up that triggered a sharp fall in the luxury goods company’s shares.
Ms Cartwright, who is credited in the City for much of Burberry’s rise over recent years, is to leave the company in July. She will be replaced by Carol Fairweather, senior vice-president of group finance, who has reported to her for the past six years.
Ms Cartwright’s departure – announced along with the appointment of John Smith, former chief executive of BBC Worldwide, as chief operating officer – caps a period of uncertainty at the fashion house.
In September, the group which is known for its check-lined trenchcoats and scarves, surprised the market by warning that sales had slowed in the second quarter, and profits for the year to March would be at the lower end of expectations. The warning sent the shares down more than a fifth in a single day.
Confusion over Burberry’s trading outlook was exacerbated last month when the company blamed the credit crunch in southern Europe for cuts to wholesale revenues forecast for the second half to March.
At the same time, it reported a recovery in sales in China and retail sales in the third quarter, which account for the bulk of revenues. Analysts revised their full-year forecasts back up.
Ms Cartwright, aged 49, has been at Burberry since 2004 – predating Angela Ahrendts, who was made Burberry’s chief executive in 2006.
Her departure would be a blow for the group, said brokers. They credit her with keeping a tight grip on the supply chain, costs and the balance sheet during expansion.
Since Ms Cartwright’s arrival at Burberry, profits have more than doubled and the shares have tripled. The shares fell 6.5 per cent to close at £13.37 on Thursday on news of her impending departure.
Burberry said Ms Cartwright was stepping down “in order to pursue new interests”, but declined to elaborate. Mr Smith, chief executive of BBC Worldwide for seven years until 2012, will move over from non-executive director into the newly created role of chief operating officer in March.
Burberry said its recent expansion – including last year’s decision to move into producing its own-branded perfumes and cosmetics – had warranted an additional executive position on the board for Mr Smith.
“The key message is no change in group strategy: Burberry has simply become a much bigger company, and given the significant changes and opportunities ahead, the newly created COO position should be seen as a natural development for the group,” said Rogerio Fujimori, analyst at Credit Suisse.
From BBC buttons to trenchcoat chic
John Smith’s appointment as chief operating officer at Burberry is a sign of the growing convergence between media and retail, according to analysts, writes Robert Budden.
For “impulse” fashion brands such as Net-a-porter or Burberry, which need to excite consumers with video and editorial, it is becoming more important to have people with deep knowledge of content.
Burberry already engages consumers with its brand with video, such as behind-the-scenes clips of Romeo Beckham at a fashion shoot, or by allowing people to customise trench coats online. The hiring of Mr Smith, it hopes, will enable it to enhance this engagement.
During more than seven years as chief executive of BBC Worldwide, the public service broadcaster’s commercial arm, Mr Smith oversaw the launch of the global BBC iPlayer and had commercial success in exploiting some of the top BBC programmes overseas – from Top Gear to Dr Who.
Analysts said these broadcast skills as well as his success in building the BBC brand internationally would prove valuable as Burberry seeks to expand further in markets such as Asia and develop more innovative content across digital media, in particular in mobile.
BBC Worldwide built its digital business from 2.7 per cent of total revenues in 2008 to 12.8 per cent last year.
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