Shares
in
the
British
luxury
fashion
brand
Burberry
(BRBY)
are
down
16.4%
after
the
luxury
brand
issued
a
profit
warning
and
suspended
its
dividend.
The
company,
renowned
for
its
iconic
camel
trench
coats,
has
subsequently
replaced
chief
executive
Jonathan
Akeroyd.
At
the
opening
of
trading
this
morning,
shares
in
the
company,
which
is
a
constituent
of
the
FTSE
100
index,
fell
16.73%.
They
are
currently
down
16.4%,
and
are
down
47%
since
the
beginning
of
the
year.
Akeroyd
will
now
be
replaced
by
Joshua
Schulman,
who
was
formerly
the
chief
executive
of
luxury
bag
and
shoe
brands
Coach
and
Jimmy
Choo.
Akeroyd
has
been
in
post
for
just
two
years.
Schulamn
said
he
was
“deeply
honoured”
to
take
the
helm
of
the
company.
“Burberry
is
an
extraordinary
luxury
brand,
quintessentially
British,
equal
parts
heritage
and
innovation,”
he
said.
Why
is
Burberry’s
Share
Price
Down
so
Much?
Burberry
is
among
the
luxury
retailers
experiencing
a
slowdown
in
sales
amid
a
wider
contraction
in
certain
areas
of
luxury
spending
across
the
world.
The
British
brand’s
sales
in
the
Asia
Pacific
Region
dropped
23%,
while
sales
in
mainland
China
and
the
Americas
also
fell
21%
and
23%,
respectively.
In
Europe
today,
Zurich-listed
watch
maker
Swatch
(SWGAY)
suffered
a
10%
share
price
fall
after
it
revealed
a
70%
drop
in
operating
profits
in
the
first
six
months
of
2024.
The
company
owns
iconic
watch
brands
like
Omega
and
Blancpain.
The
Morningstar
View
For
Jelena
Sokolova,
senior
equity
analyst
at
Morningstar,
Burberry’s
sales
revenue,
which
is
down
21%
in
the
three
months
to
the
29th
of
June,
looks
“weak.”
However,
she
feels
the
replacement
of
Akeroyd
with
Schulman
could
“signal
a
pivot
towards
a
more
affordable
direction”
for
the
brand.
Performance
in
the
luxury
space
has
been
a
mixed
bag.
Gucci
owner
Kering
(KER)
may
have
found
it
increasingly
challenging
to
reboot
Gucc’s
popularity
as
a
luxury
label.
Hermès,
(RMS)
which
makes
Birkin
bags,
however,
is
enjoying
a
jump
in
quarterly
revenues.
Key
Morningstar
Metrics
For
Burberry
• Morningstar
Fair
Value
Estimate: £157.00
• Morningstar
Star
Rating: ★★★★★
• Morningstar
Economic
Moat
Rating:
Narrow
• Morningstar
Uncertainty
Rating:
High
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