Marco Gobbetti was hired by Burberry to solve one boardroom crisis – the uncomfortable reign as chief executive of Christopher Bailey, who was clearly better suited to being the creative boss. By skipping off early, though, he’s caused another. Burberry doesn’t have a succession plan, as far as one can tell, which is not ideal when the UK’s leading fashion house is persistently talked about as a takeover candidate.
You could see Burberry’s discomfort in its effort to describe Gobbetti’s time as “nearly” five years with the company. It depends on how you count it. He became chief executive almost exactly four years ago after a six-month warm-up tour of Asia. More relevantly, he launched his five-year plan in November 2017, so, even if he stays until the end of this year, he will have overseen only four years of a five-year overhaul, which is not quite a full lap of the catwalk.
One assumes Gobbetti’s wish to be closer to his family in Italy is genuine because the business he is joining, Salvatore Ferragamo, is about a third of Burberry’s size. Or perhaps the Italians offered to pay him more.
Either way, Gerry Murphy, Burberry’s chairman, seems to have been blindsided by events. His first task will be to establish if Riccardo Tisci, the designer hired by Gobbetti after the intended dream partnership with Bailey didn’t last, is staying or going. For the chief executive post, one assumes Burberry will want a Gobbetti lookalike – a commercial operator focused on the top end of the fashion league where the profit margins are best.
If that means plucking someone from a continental European fashion house, the process may not be quick. The fashion industry is also a personality business with salaries to match. Burberry’s shares fell 9%, a severe reaction to one individual’s departure but a reflection of the anxiety in shareholder ranks. The company always makes a drama out of succession. The difference this time is that nobody seems to have seen it coming.
FCA’s cryptocurrency crackdown lacks bite
The Financial Conduct Authority’s clampdown on one of the world’s biggest cryptocurrency exchanges may sound like a strong regulatory intervention. In reality, it’s a demonstration of how hard it is to constrain an operator with many international tentacles.
The only entity that has been told to stop regulated activities in the UK is Binance Markets Limited, the UK subsidiary. As Binance gleefully pointed out, and as the FCA concedes, there is nothing to stop UK customers using the main Binance.com website, which is not registered in the UK. Indeed, that may already be the place where UK punters have been transacting; it’s hard to tell.
The FCA’s move underlines global regulators’ worries about the rise of crypto trading – or specifically the potential for money laundering. The permission that Binance Markets Limited was seeking in the UK until it withdrew its application in May required stringent money-laundering controls to be in place. The UK regulator, like others elsewhere, seems dismayed by standards in the crypto-trading industry.
The hard part is achieving coordination among global regulators. Binance says it is a company without a headquarters, so it’s a challenge even to know where to send a stiff letter. One assumes the regulators will eventually win their battle to regulate – but this latest episode is merely a skirmish.
UK joins the battery race
Prepare for a ministerial fanfare when Nissan, as seems likely this week, unveils plans to build a new battery “gigafactory” in Sunderland. And, to be fair, it will be an important moment – the first big UK investment in the batteries that will power the car industry’s electric revolution.
Do not, though, assume the UK is in the lead in this race. The car industry is always political and the EU is also throwing subsidies at carmakers in the knowledge that decisions made now will affect investment choices for decades.
Nissan’s move will get the UK off the starting grid, and probably allow the government to argue that its £500m funding pot to encourage the production of electric batteries can make a difference; many outsiders were sceptical on that point. But Nissan, committed to Sunderland after its Brexit wobble, was never in much doubt. The other big carmakers are the ones to watch.
