Shake-up puts check on Burberry
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.