(Bloomberg) -- The chairman of Burberry Group Plc said the future of creative designer Daniel Lee will depend on the strategy and direction of the struggling fashion brand’s new leader.
Asked about Lee during the British company’s annual meeting on Tuesday, Chair Gerry Murphy said new chief executive officer Joshua Schulman would decide on the matter.
“The chief executive of the day has to have the flexibility and the scope to craft their own team,” Murphy told investors, speaking a day after Burberry issued a profit warning and paused its dividend.
Burberry surprised the market on Monday by revealing that Schulman would take the reins after Jonathan Akeroyd — who hired Lee as part of a wider plan to reinvent the “Britishness“ of Burberry — left the brand with immediate effect after less than two-and-a-half years in charge.
Schulman, a former CEO of Michael Kors, Coach and Jimmy Choo, starts the job on Wednesday and will be able to implement Burberry’s strategy in his own way, Murphy said, adding that the new boss will decide what the “shape of the team should look like.”
On Monday, however, Murphy said that Lee “wasn’t going anywhere” during a call with reporters.
Lee was hired in 2022 to replace Italian designer Riccardo Tisci who had been brought in by Akeroyd’s predecessor, Marco Gobbetti.
Burberry has sought to elevate its image in recent years as a more premium luxury brand, but higher prices have failed to resonate with so-called aspirational shoppers, who only occasionally make entry-level luxury purchases. Murphy denied the company would trade down to a mass-market position at Tuesday’s meeting, but said it would have to introduce some more accessible pricing.
All the company’s resolutions were passed at Tuesday’s AGM, but 13% of the votes that were cast opposed Burberry’s remuneration report. The biggest rebellion was against the reelection of Antoine de Saint-Affrique to the board, which was opposed by nearly 24%.
Share Price Drop
Burberry’s shares fell 16% on Monday following news of Akeroyd’s sudden departure and the British company’s admission that it could make a loss in the first six months of its year. On Tuesday, they were trading a further 5% down and have now lost around two thirds of their value in the last year.
The company confirmed this week that there will be job cuts as part of a wider plan to save costs. Chief financial officer Kate Ferry said it’s also likely they will have to make provisions for high stock levels.
(Adds context in eighth and ninth paragraphs. A previous version corrected the spelling of Schulman’s name in fifth paragraph.)
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