The ( ) share price has nosedived 75% in just a year and a half. Adding salt to investors’ wounds, the dividend’s been suspended and the stock’s been relegated to the mid-cap . But after a decline that feels longer than one of the brand’s iconic trench coats, could the bottom finally be in sight? And might a big recovery even be on the cards? Here are my thoughts.
Brand elevation When I was younger, some items (mainly plaid scarves and caps) weren’t necessarily associated with the affluent shoppers Burberry wanted. I remember seeing a motorbike doing a wheelie down the road with the rider completely decked out in Burberry check (real or otherwise). In fact, a 2011 book by Owen Jones called had a Burberry-style checked hat on the cover.
These associations negatively impacted the brand’s luxury image, to put it mildly. In response, and as part of a wider trend in the luxury sector, the company reduced the visibility of its check pattern; reined-in license deals to give it more control; and focused squarely on premium and higher-end fashion. This strategy successfully restored its must-have status at the time.
However, in recent years, Burberry’s aimed to position itself as an ultra-luxury label. While ambitious, this move has faced significant challenges. The stock looks cheap Higher prices put it up against the likes of Gucci and Louis Vuitton.
But customers have been slow to embrace this, especially during a cost-of-living crisis and weak consumer spending in Ch.