Investors check out as Burberry disappoints
THE debut collection from the new Burberry creative director, unveiled this week, has failed to wow either the fashion or investment world.
Riccardo Tisci, who joined from Parisian fashion house Givenchy just six months ago, showcased his spring/summer 2019 collection for the British brand at London Fashion Week on Monday.
While some commentators criticised the slew of beige clothing and slightly modified trench coats as ‘mundane’, financial analysts were also unimpressed, causing Burberry to become one of the FTSE’s biggest fallers yesterday.
The good news, analysts at JP Morgan Cazenove said, was that Tisci ‘appears to be embracing the breadth and size of the Burberry brand’.
But JP Morgan’s Melanie Flouquet added: ‘The bad news is that in trying to please everyone he might be losing out on the brand new messages.’
At a time when Burberry has been trying to draw customers and investors back on side, after it emerged that it regularly destroyed millions of pounds’ worth of unsold stock, the criticism was another hurdle. Shares fell by 4.9pc, or 103p, to 2008p.
Despite Burberry’s potential fashion faux pas, the FTSE 100 ended the day up 0.49pc, or 36.20 points, at 7367.32. Miners helped heave the blue-chip index higher, after China said it was planning a broad import tax cut to counteract tariffs proposed by the US.
Fresnillo made the biggest gains among the miners, which are sensitive to economic changes in metal-hungry China, climbing 2.7pc, or 22p, to 847.6p.
Over in the US, the Dow Jones
Industrial Average hit a new record, rising 0.95pc, or 251.22 points, to 26,656.98.
Gains at Apple shunted the index of 30 major companies up, as lessening trade fears boosted investor confidence. The S&P 500 rose 0.8pc to an all-time high, causing President Donald Trump to tweet: ‘Congratulations USA!’
But back on the FTSE 250, trading company IG Group plummeted as its first-quarter revenue dropped 5pc to £128.9m from last year’s record levels.
The firm admitted it was feeling the pressure after a regulatory crackdown by European authorities to better protect inexperienced traders dealing in assets like shares and currencies.
Its shares fell 9.8pc, or 84.5p, to 779.5p, as it warned clients had completed ‘significantly lower’ volumes of trading in August than the previous month. Southend Airport’s owner Stobart Group kept investors happy, as shares rose 1.4pc, or 3.5p, to 246p despite announcing that its annual results would be lower than predicted. It warned its biomass fuel business would undershoot expectations, blaming delays in the commissioning of energy plants it hopes to supply.
Its rail unit, which holds contracts with Network Rail and Transport for Greater Manchester, was a particular disappointment. Stobart expects to pull in less revenue on long-term rail contracts, and its results for the year would again miss projections.
But results from its airport branch would be ‘broadly in line’ with expectations, as it remained confident that a new agreement with Ryanair would help it build passenger numbers at Southend Airport to 5m by 2022.
The mood was more sober at specialist pharmaceuticals company N4 Pharma, which is ditching the generics division that aims to make cheaper unbranded versions of popular drugs.
It follows disappointing results from its trial of a fast-acting alternative to Viagra which didn’t have the desired effect. Shares crashed by 39.6pc, or 2.65p, to 4.05p.