Burberry stock drops as CEO departure spooks investors
Shares sank 5.5 per cent in luxury fashion brand Burberry today, dragging its total share price to 1,955 as investors seemed uncertain about the company’s direction following its CEO’s exit.
The brand pulled in £479m in revenue over the past three months despite over ten per cent of its stores remaining closed due to Covid restrictions.
Full-price digital sales more than doubled in the 13 weeks to 26 June, in comparison with the same period last year.
Online sales would have fuelled the 86 per cent bump to revenue, up from £257m the year prior, as the luxury brand has been bruised by a lack of tourist footfall.
The brand said this morning that its comparable retail store sales across Europe, the Middle East, India and Africa (EMEIA) surged 146 per cent year-on-year.
However, is added that the business continued to be impacted by weaker tourist footfall and Covid related store closures in Europe in particular, which fellow luxury brand Mulberry reported earlier this month.
Despite restrictions curbing European sales, Burberry has opened a new store on Sloane Street in London, as it readies for three more store openings to follow over the next year.
‘Ultra-savvy marketing’
Eastern Asia buoyed the brand as European sales took a hit, with full-price sales growing 55 per cent in China and more than 90 per cent in Korea.
The group put the growth down to new and younger clientele, willing to splash cash on luxury items online or in-store.
“Burberry’s ultra-savvy marketing drives are helping the company win new style-hungry customers across the world, desperate to get their hands on a slice of the brand and willing to pay full price for the privilege,” Streeter explained.
“Burberry has a knack of signing up stars to catch the mood of its young and growing fan base. Its campaign featuring Marcus Rashford engaged followers on social media, with its mural of him in Manchester, a magnet for anti-racist campaigners.”
With its targetted marketing, the brand looks set for a strong fiscal year, according to director of research at investment research group Edison, Neil Shah.
“As Burberry’s turnaround continues to gather momentum, investors and other key stakeholders will be looking out with anticipation as to who will replace outgoing CEO Marco Gobbetti, with the announcement expected shortly.
“While this uncertainty may cause minor disruption, a number of high-profile names are being tipped for the job, and Burberry’s performance in the first quarter shows the brands resilience meaning a strong year ahead looks extremely likely.”