Burberry, a prominent name in British luxury, has been removed from the FTSE 100 index due to a substantial drop in its share price.
- Over the past six months, Burberry’s share price plummeted by 50.8%, contributing to its movement to the midcap FTSE 250 index.
- The luxury brand faced significant financial challenges, including a 22% year-on-year revenue decline.
- Former CEO Jonathan Akeroyd acknowledged difficulties against slowing demand before his recent replacement by Joshua Schulman.
- Burberry plans to release its interim financial results on November 14, shedding further light on recent performance.
Burberry, renowned in the luxury fashion sector, has recently faced turbulent financial setbacks that led to its removal from the FTSE 100, according to the latest review by FTSE Russell. The company has now been repositioned into the FTSE 250 index. Burberry’s share price has seen a staggering decline, falling by 50.8% over the past six months and an overall 71.5% dip in the last year, closing at 623p as of September 4.
This detachment from the FTSE 100 marks a significant moment for the brand, attributed primarily to a 22% year-on-year drop in revenue, which stood at £458 million for the 13 weeks ending June 29. Moreover, the previous fiscal year reported a 4% decrease in total revenue to £2.97 billion and a substantial 34% reduction in operating profit, down to £418 million for the year ending March 30.
Challenges intensified as Jonathan Akeroyd, then CEO, grappled with executing the company’s strategic plans amid a decelerating luxury market. In a statement made in May, Akeroyd remarked, “Executing our plan against a backdrop of slowing luxury demand has been challenging.” His immediate departure led to Joshua Schulman taking over the leadership position in July.
The forthcoming interim financial results for the 26-week period ending September 28, set for release on November 14, are anticipated to provide additional insights into Burberry’s ongoing efforts to navigate these financial hurdles.
Burberry’s shift from the FTSE 100 reflects serious challenges, demanding strategic reassessment.
