Burberry hands control to Bailey

After eight years of guiding Burberry as its CEO, Angela Ahrendts has stepped down and Christopher Bailey has taken the reins.

The general market consensus is that under the guidance of Angela Ahrendts, Burberry has been the role model for most retailers in how to reorganise your business to get the most out of the Asian market. A point only too clearly shown by the fact that Apple has headhunted her and will be handing her a 'golden handshake' of $68 million in shares. In her time running the company she has seen the value of Burberry increase from £1.9 billion up to £6.8 billion, more than 250%.

So where next for Burberry? Christopher Bailey will take over the role of CEO having previously worked as the company’s chief creative officer. This will be a promotion from within and as such, Mr Bailey will know the inner workings of the firm which should make for a smooth transition. The flip side of that coin is this is Mr Bailey’s first role of this type, and he is taking over from the Sir Alex Ferguson of the FTSE CEO’s. It will be particularly difficult not to be judged against his predecessor, and as Asian market growth has continued to cool this will be difficult.

The last 18 months saw the share price in Burberry plateau and they are currently moving into overbought territory, so we would be cautious of going long before a more attractive correction has taken place and the shares were closer to the 1400p support.

Burberry group chart

The information on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG Bank S.A. accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it and as such is considered to be a marketing communication.

Find articles by analysts