Shake-up puts check on Burberry

The Daily Telegraph - Business - - Business - Louis ash­worth­worth

SHARES in fash­ion house Burberry took a knock as the com­pany an­nounced plans to re­struc­ture its op­er­a­tions.

The FTSE 100 firm, which has been un­der long-term pres­sure af­ter Covid-19 rip­pled across its key mar­kets, an­nounced the cre­ation of three new busi­ness units in an ef­fort to im­prove its prod­uct of­fer­ing.

It will in­tro­duce spe­cialised units fo­cus­ing on ready-to-wear, accessorie­s and shoes, say­ing the changes will “en­hance our prod­uct fo­cus, in­crease our agility and el­e­vate qual­ity”.

As part of the changes, Chris­tian Dior’s Adrian Ward-Rees will re­join the group from later this month to lead its ready-to-wear unit.

Marco Gob­betti, Burberry’s chief ex­ec­u­tive, said: “The changes we in­tend to make will en­sure we have the right struc­tures in place as we en­ter the next phase of our strat­egy.”

Its shares closed down 18.5p at £16.10 yes­ter­day.

It was a bad day for Euro­pean stock mar­kets, with the FTSE 100 drop­ping es­pe­cially sharply to wipe out Mon­day’s gains.

Most of London’s blue-chips dipped, with the FTSE 100 end­ing down 1.5pc, or 96 points, at 6,189.9, while the mid-caps had a sim­i­lar 1.1pc fall, down 200 points to 17,350.

Pre­mier Inn owner Whit­bread led fall­ers on the FTSE 100, down 135p to £23.05 af­ter a trad­ing up­date. The ho­tel owner said that its to­tal sales dropped by 79pc dur­ing the 13 weeks to the end of May as Covid-19 forced the clo­sure of most of its ho­tels.

It now ex­pects the whole of its es­tate to have re­opened by the end of July, with over 270 UK ho­tels and 24 restau­rants al­ready back in op­er­a­tion.

Citi’s Monique Pol­lard said the re­sults were in line with ex­pec­ta­tions, adding that un­cer­tainty over the pace of re­cov­ery was the main ques­tion mark head­ing for­ward.

On the FTSE 250, Mi­cro Fo­cus dropped 85.9p to 352.8p af­ter the group re­ported it had swung to a $1bn (£796m) loss dur­ing the six months to the end of April.

The soft­ware group took a $922m write­down as a re­sult of “in­creased eco­nomic un­cer­tainty” due to Covid-19. Stifel’s Ge­orge O’Con­nor said the up­date “reads better than ex­pected”, but added Mi­cro Fo­cus faced a num­ber of head­winds.

Spread­bet­ting plat­form Plus500 found it­self among the top ris­ers on the mid-cap in­dex, climb­ing 44p to £13.79 af­ter re­port­ing a jump in client ac­tiv­ity in re­cent months.

Liberum’s Rahim Karim said the re­sults re­flected “more than just favourable mar­ket con­di­tions”, and also showed the strength of the group’s trad­ing plat­form.

On the Aim, fast-fash­ion gi­ant Boohoo con­tin­ued to take a bat­ter­ing in the wake of re­ported labour abuses at one of its UK sup­pli­ers.

The group has faced heavy scru­tiny – ditched by re­tail­ers Next and Asos, and fac­ing an out­cry from so­cial me­dia in­flu­encers.

It dropped an­other 11pc to end down 35.3p at 261.4p, ex­tend­ing Mon­day’s 23pc share price drop.

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