The news comes as Burberry's management structure finds itself regularly in the headlines. Last week the company announced that Smith, along with Bailey and CFO Carol Fairweather, would see their salaries cut by up to 75 per cent. While the company has a year to find a replacement for Smith (who will remain on the board until summer 2017), analysts are predicting that his departure will lead to a shake-up at the top, where Bailey currently holds the positions of creative director and CEO.
"John Smith retiring opens the opportunity for further changes in senior responsibilities," said Luca Solca, an analyst at Exane BNP Paribas, reportsBloomberg. "Burberry needs to go through management adjustments, as the organisation based on Christopher Bailey having a dual role does not seem ideal and results are under pressure."
In May, the company was said to be looking to bring in directorial back-up for Bailey, who assumed the position of CEO in addition to his already busy job creating the aesthetic for the company when Angela Ahrendts left the position to move to Apple in 2013. Shortly after taking on the double responsibility, Bailey promoted Luc Goidadin to chief design officer to "oversee all design activities" under his leadership, although shareholders have been recently calling for more support.