Celine boss "Burberry" to replace Christopher Bailey as Chief Executive

Burberry has replaced Christopher Bailey as chief executive after a turbulent two years running the fashion company.

Marco Gobbetti, who runs French luxury label Celine, will take over the role, joining the FTSE 100 group in 2017.

Mr Bailey will become president and remain chief creative officer - the role he held before also taking on the position of chief executive.

Shares in Burberry

jumped almost 8% after the move was announced.

Many shareholders had been unhappy with Mr Bailey's performance as both chief executive and chief creative officer and had called for change at the top.

In May, the company reported a £29m fall in annual pre-tax profits for the year to 31 March to £415.6m and said it expected the "challenging environment for the luxury sector" would continue.

Burberry chairman Sir John Peace Mr Bailey had done "an excellent job set against a backdrop of challenging market conditions", but had "identified the need for a new chief executive for the business who could partner with him".

Mr Gobbetti had "an outstanding track record of delivering growth in the luxury industry and his vision for the sector and how it will evolve is extremely impressive", Sir John said.

Burberry shares have lost more than a third of their value over the past 12 months after sales in Asia - particularly Hong Kong - fell as Chinese consumers reined in spending. About a third of Burberry sales come from Asia.

Burberry said in May that it would reduce its product range and focus more on handbags in response to slowing sales.

'Collaborative partnership'

The jump in the share price following the announcement to £12.18 puts the stock on track for its best day in three years. Deutsche Bank raised its price target from £12.50 to £13.50. 

Mr Bailey said Mr Gobbetti's experience and skills in luxury and retail would be invaluable: "We are going to enjoy a wonderfully collaborative partnership that makes me very excited for our future at Burberry."

Burberry has also appointed Julie Brown, chief financial officer at Smith & Nephew, to the new role of chief operating and financial officer.

The company is due to report on first-quarter trading on Wednesday.