I’m searching for the best recovery shares to buy for next year. And ( ) is near the top of my list after its recent share price collapse. Should I buy it for my portfolio? Here’s my view.
On the rack I take ‘s advice to “ ” extremely seriously. It’s why I’ve never previously considered buying Burberry shares for my portfolio. It might be my age, or because I don’t understand fashion.
Regardless, I don’t know what makes its products better or worse than other luxury brands. I know it’s famous for raincoats and its distinctive check pattern, but that’s it. However, the sharp fall in its share price this year has made me take notice.
At 601p per share, Burberry’s price has crumbled by two-thirds during the past 12 months. As I say, I’m not the guy to talk to for fashion tips. But I know what a company in distress looks like.
And the red lights are flashing here. Burberry — which is due to lose its prestigious FTSE 100 listing next week — reported a 22% sales slump in its latest financials covering April to June. It’s also facing large costs as it revamps its stores, and has suspended the dividend to ease the pressure on its balance sheet.
Troubles run deep Like other luxury brands, the firm is suffering as wealthy customers tighten their wallets in response to the uncertain economic environment. Even this formerly robust end of the retail market has suffered in the current climate. Names including , and have also reported disappointing sales, in .
