Reports indicate Burberry may be removed from the FTSE 100 Index due to a sharp decline in share prices.
- Burberry has seen a 70% drop in share prices over the past year, reaching a 14-year low.
- The company’s profits fell by a third in the year ending March 2024 amid decreasing global luxury demand.
- Revenue experienced a 4% decline year-on-year, with Q4 store sales dropping by 12%.
- A leadership change occurred in July, as Jonathan Akeroyd stepped down, succeeded by Joshua Schulman.
British luxury brand Burberry is facing the possibility of being removed from the FTSE 100 Index, a significant indicator of a company’s financial strength and market confidence. This potential delisting is attributed primarily to a sharp 70% decline in Burberry’s share prices over the last year, marking the lowest point in 14 years. Such a downturn places Burberry’s continued presence in the FTSE 100, which it has occupied for 15 years, in jeopardy.
The FTSE 100 Index, maintained by market operator FTSE Russell, comprises the 100 most highly capitalised blue-chip companies listed on the London Stock Exchange. Burberry’s decline in share value means it might transition to the midcap FTSE 250 Index following the quarterly rebalancing next month, depending on the final share prices at the close of business next Tuesday.
Burberry’s financial performance has suffered significantly over the past year. The company reported a 33% drop in profits for the fiscal year ending 30 March 2024. This downturn is set against a backdrop of slowing demand for luxury fashion on a global scale. In particular, revenue fell 4% annually to £2.97 billion, with a notable 12% decline in fourth-quarter store sales, reflective of weak consumer confidence and market conditions.
Former CEO Jonathan Akeroyd, who described the challenge of executing the company’s strategic plan amidst declining luxury demand, stepped down in May. His immediate replacement, Joshua Schulman, took over leadership in July. Schulman is now tasked with navigating the brand through this uncertain financial landscape. Burberry has so far not commented on its situation regarding the FTSE 100 speculation.
Burberry’s future within the FTSE 100 will shortly be determined by its upcoming financial evaluations.
