By Geoffrey Smith
Investing.com -- Shares in Burberry (LON:BRBY) rose on the news that highly-rated Daniel Lee will succeed Riccardo Tisci as chief creative officer, who confirmed his long-rumored departure from the U.K. luxury fashion group on Wednesday.
Lee was most recently creative director at Kering's (EPA:PRTP) Bottega Veneta brand, where he oversaw record sales in a three-year period spanning the pandemic. That was largely due to the performance of its leather goods ranges. That's an area Burberry has thrown more resources at in recent years as it expands beyond its historical range of trenchcoats and accessories.
Yorkshire-born Lee has also worked at Kering 's Balenciaga brand, as well as at Celine, Maison Margiela and Donna Karan.
Tisci is stepping down at the end of this month, as widely expected, five years after being hired by then-CEO Marco Gobetti to restore the group's fortunes after an ill-fated foray downmarket. His last collection, for Spring and Summer 2023, was presented this week.
Analysts at RBC said the announcement was positive "as some investors believe Burberry requires a fresh perspective from a creative and design perspective."
Jefferies analysts noted that "Tisci’s designs were not resonating strongly on social media, and sales growth for Burberry has been lackluster" relative to those of its peers. Even so, they cautioned that it may take up to two years for a new creative director to effect a 'brand reset'.
The announcement comes in the same week that Burberry lost its chief financial officer, Julie Brown, to GlaxoSmithKline (NYSE:GSK).
By 05:00 ET (09:00 GMT), Burberry stock was up 3.7%, sharply outperforming the benchmark FTSE 100 which was down by nearly 2% after a withering verdict from the International Monetary Fund and credit ratings firm Moody's on the new government's plans to fund a massive package of tax cuts and energy subsidies with higher borrowing. Burberry generates less than a quarter of its overall sales in the U.K., and the pound's weakness typically acts as a tailwind to its reported earnings.