Blackfriar: Share slump showed value of departing Burberry chief

Mr Bailey, the Yorkshire designer credited with reviving the luxury brand, is in an unenviable position.

While his credentials are impeccable, the City took fright at the news that long-standing boss Angela Ahrendts is moving to Apple.

Mr Bailey is the designer who rescued Burberry after it was slammed as the ultimate “chav” brand. Its all-time low came when former EastEnders actress Daniella Westbrook and her daughter were snapped by the paparazzi wearing head-to-toe Burberry.

For Burberry it was a slow, but dogged climb back up the fashion ladder and Mr Bailey deserves to be recognised for his achievements.

So why the six per cent share slump?

Some analysts said that the fact the 42-year-old will hold two major positions – chief executive and chief creative officer – prompted concerns that he might be taking on too much.

“There will undoubtedly be relief that Mr Bailey, the driving force behind the brand for the last 12 years, is staying,” Morgan Stanley said in a note to clients.

“But we anticipate some investor concern about combining the chief creative officer and CEO roles, which are both time-consuming and require very different skill sets.”

But Blackfriar suspects that the real concern is disappointment that Ms Ahrendts is leaving.

Richard Hunter, Head of Equities at Hargreaves Lansdown Stockbrokers, said: “The impressive update has been overshadowed by the news that the chief executive will be leaving the company next year. In early trade the shares dipped six per cent as investors began to assess the implications of her departure. Whatever the ramifications may be, it seems that the she leaves the company in good shape.”

It’s not a slur on Mr Bailey that the shares slumped, it’s a sign that investors will miss Ms Ahrendts’ leadership.

Ms Ahrendts is not alone here. When Harriet Green announced her intention to leave Leeds-based electronics distributor Premier Farnell last year, its shares also took a hit.

The quality these two women share is that they have taken on what has been perceived as men’s roles and done a damn good job.

Ms Green left Premier to join Thomas Cook, the world’s oldest travel business which was struggling in the aftermath of the global recession. She unveiled a £350m cost-cutting plan to reduce physical stores, boost internet sales and axe 2,500 jobs.

Following the departure of Ms Ahrendts, there will only be 11 female CEOs at FTSE 350 companies.

Analysis by S&P Capital IQ shows that this means that just 3.14 per cent of FTSE 350 companies have female CEOs.

They include Ms Green, Carolyn McCall at easyJet, Alison Cooper at Imperial Tobacco, Diana Harding at TalkTalk Telecom, Louise Makin at BTG, Angela Spindler at N Brown, Ruby McGregor-Smith at MITIE, Caroline Banszky at The Law Debenture Corporation, Lynn Fordham at SVG Capital, Katherine Garrett-Cox at Alliance Trust and Yorkshire’s own Dorothy Thompson at Drax.

The Yorkshire Report 2013 by BDO revealed that women make up 10 per cent of the boards of the largest Yorkshire businesses. This was up from 9.3 per cent last year and the highest figure since the report started seven years ago, suggesting that Yorkshire is ahead of the rest of the country when it comes to recognising female leadership.

While the EU is pushing for new regulations to promote women to board level, few female businesswomen agree with quotas.

Women need to achieve their place at the top of Britain’s top 350 companies by their talent alone. The point is, that maybe with the exception of Trinity Mirror’s former chief executive Sly Bailey, all of Britain’s female chief executives are doing a sterling job.

Maybe the problem here is not the lack of female talent or the need for quotas to even up boardrooms, it’s time for aged, male non-executives to realise the potential women have when they make their next appointments.

Please note gentlemen that there wasn’t a single female at the head of the banks during the banking crisis.

As Ms Green has shown, female bosses are not scared to make harsh decisions, but history shows they don’t make the same foolhardy, greed-driven mistakes that male bosses have made.