COO stands down and Bailey takes a pay cut at struggling luxury brand
Burberry has announced that its Chief Operating Officer has decided to leave after seven years at the company. The news comes as CEO and Chief Creative Christopher Bailey was revealed to have taken a 75% following disappointing financial results.
John Smith will depart his role as COO and step down from Buberry’s Board in 2017. He said: “I have intensely enjoyed working for one of the world’s great luxury brands and I am proud of my contribution to the company’s success over this period, particularly helping the company to be at the vanguard of digital and contributing to the growth of the beauty business.” He added: “With the company’s future strategies now in place, I am ready to embark on a new challenge.”
Smith has served as COO since 2013 and acted as a non-executive Director since 2009.
Bailey added that Smith had made a “significant contribution” to the company over the past seven years. He said: “I have personally valued and enjoyed John’s partnership and I would like to thank John for everything he has bought to Burberry.”
The CEO was also revealed to have taken a 75% pay cut from £7.5m in 2014 to just £1.9m in 2015. In the company’s latest annual report, Burberry Chairman, Sir John Peace, explained: “Our overall approach to incentive structures for all staff, including senior management, is based on – so when the business does not perform as well, this has an impact on what we pay to our staff.” Burberry said it would not be giving pay rises to any of its executive directors or senior management for the financial year ending 31 March 2016.
Burberry has struggled in recent years as the luxury market feels the effects of a slowdown in the Chinese economy. Chinese tourists in Europe previously accounted for 40% of sales at Burberry, but this has declined alongside a slump in tourism following the recent terrorist attacks in Paris and Brussels.