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By Matthew Dalton 

PARIS -- Burberry Group PLC named Italian designer Riccardo Tisci as creative director, seeking to revive its fortunes as the British fashion label struggles with weak sales in the U.S., its largest market.

Mr. Tisci was previously the creative director of French couture house Givenchy, a unit of LVMH Moët Hennessy Louis Vuitton, leaving in 2017 after 12 years on the job. His high-concept designs helped turn around the brand, which was losing money when he started on the job in 2005. By 2016, revenue had increased nearly seven-fold, and operating profit was EUR51 million.

But now Mr. Tisci, 43, faces the task of reviving a much larger company grappling with the problems of the U.S. retail market, including faltering department stores in the U.S. market, which accounts for more than a fifth of Burberry's global sales. Burberry relies on department stores for 30% of its revenue in the U.S., much higher than other luxury brands such as Gucci and Prada. Louis Vuitton and Hermès, two of the most successful luxury brands, don't sell any product through department stores in the U.S.

Mr. Tisci also faces the challenge of re-energizing a brand that was losing sway on younger shoppers under Christopher Bailey, Burberry's longtime designer who left last year after 17 years on the job. Mr. Tisci has previously collaborated with lifestyle brands such as Nike on product lines that have resonated with millennial luxury consumers.

"His designs have an elegance that is contemporary," said CEO Marco Gobbetti, "and his skill in blending streetwear with high fashion is highly relevant to today's luxury consumer."

Burberry has long complained that markdowns and poor product placement in department stores have tarnished the brand, known for its distinctive check pattern. More recently, e-commerce has sapped malls, department stores and other brick-and-mortar outlets of foot traffic, sending sales hurtling downward.

Burberry said Mr. Tisci would start on the job March 12 and present his first collections in September.

Mr. Tisci's appointment underscores how Burberry is seeking to recover by firming up its luxury credentials. Last year, Burberry plucked Mr. Gobbetti away from Celine, another upscale French fashion house owned by LVMH Louis Vuitton Moet Hennessy.

Last November, Burberry warned that for fiscal 2019 and 2020, revenue and operating margin would be broadly flat, mostly due to costs related to restructuring and to its effort to scale back its presence in what it call nonluxury locations. Only in fiscal 2021 does the brand expect an uptick.

Write to Matthew Dalton at Matthew.Dalton@wsj.com

(END) Dow Jones Newswires

March 01, 2018 07:20 ET (12:20 GMT)

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