Burberry set to re-enter the FTSE 100 in March reshuffle
Burberry looks set to re-enter the FTSE 100 in March after its shares doubled since their lows in September.
The luxury brand fell out of the FTSE 100 in its September quarterly reshuffle last year after its share price dropped nearly 75 per cent in 16 months.
However, glimmers of hope for a luxury rebound, plus a well-received turnaround plan directed by CEO Joshua Schulman, seem to be paying off.
The firm’s share price has risen by just over 98 per cent in the last six months. Following this performance its market cap now stands at around £4.04bn.
As of February 7, it was the 89th-largest company listed on the London Stock Exchange. If this position holds, it will secure automatic entry back into the FTSE 100 in the March reshuffle.
RBC luxury analyst Piral Dadhania said that Burberry was his “preferred turnaround idea” this year.
Burberry’s ambitious turnaround plan, launched in November, saw the brand appoint new leaders across its marketing, product merchandising and Americas divisions, remove £40m of costs, and pivot to outerwear.
Burberry had been struggling with an uncertain brand identity, a succession of new leaders and a loss in investor confidence, all of which were exacerbated by a wider post-pandemic downturn in the luxury sector.
Ironically, its turnaround plan has also coincided with early signs of a recovery in the sector.
Luxury stocks as a whole have gained around 30 per cent in the last three months, Dadhania said, following an improving consumer environment in America and stabilising performance in China.
Many analysts expect America to drive growth in luxury this year as Donald Trump implements his tax cuts, while companies are increasingly pivoting away from the soft Chinese market.