Burberry facing possible FTSE 100 Index exit amid share slump

Luxury label Burberry could be taken off the FTSE 100 Index amid an ongoing share slump that has seen impact from a wider global slowdown in the high-end sector and a wavering brand revamp.

Ahead of the index’s quarterly announcement regarding provisional changes, due to be published August 27, Burberry sits at 140th place on the index with a market capitalisation of 2.5 billion pounds, putting it below the requirements of the FTSE 100, as noted by Bloomberg, which initially reported the news.

As such, the company “looks a shoe-in for relegation from the FTSE 100”, Susannah Streeter, head of money and markets at Hargreaves Lansdown, told the media outlet.

According to FTSE Russell guidelines, a company would be removed from the FTSE 100 if its market capitalisation ranks 111th or below at the time of rebalancing.

Burberry has been undergoing a major transformation over the past year due to waning demand following a period under the creative direction of Riccardo Tisci.

Despite its efforts, including a brand identity shift driven by Tisci’s successor Daniel Lee, it hasn’t been able to regain solid ground, leading it into a reported restructuring that has resulted in a series of jobs cuts and the ousting of its former CEO, Jonathan Akeroyd.

Burberry is expected to make a loss in the first half of 2024, after its Q1 sales fell 22 percent at reported rates.

"Our Q1 FY25 performance is disappointing. We moved quickly with our creative transition in a luxury market that is proving more challenging than expected," said Gerry Murphy, chair of Burberry.